South African Individual Retirement Savings: An Analysis of the Social Factors

26 Pages Posted: 5 Jun 2020

See all articles by Gizelle Willows

Gizelle Willows

University of Cape Town (UCT), Faculty of Commerce, Graduate School of Business, Students

Date Written: Fall 2019

Abstract

This study's primary aim is to determine whether members of a South African tertiary institution's retirement fund are en route to have sufficient retirement savings. Secondly, the results are analysed between different social factors namely: age, gender, race, education level, marital status, and cost of employment. Survey data and information received directly from the retirement fund were used as inputs in a customised model. This method was unique to this study, that is, it was able to consider broader circumstances other than the member's retirement savings within the fund only. Among the sample of 753 respondents, one‐third of respondents will have insufficient retirement savings and <10% will have enough. Single, younger and male respondents are most likely to have sufficient retirement savings and this is suggested to be as a result of advantageous annuity rates upon retirement. Black/African respondents were least likely to have sufficient retirement savings. Notwithstanding the racial population divide following apartheid, societal and cultural explanations speak to a culture of increased spending coupled with high financial dependency relationships. Thus, the findings provide rich information which necessitates policies which address leakage from retirement savings, appropriate defaults, and the availability of innovative and affordable savings vehicles.

Suggested Citation

Willows, Gizelle, South African Individual Retirement Savings: An Analysis of the Social Factors (Fall 2019). Risk Management and Insurance Review, Vol. 22, Issue 3, pp. 303-328, 2019, Available at SSRN: https://ssrn.com/abstract=3618447 or http://dx.doi.org/10.1111/rmir.12130

Gizelle Willows (Contact Author)

University of Cape Town (UCT), Faculty of Commerce, Graduate School of Business, Students ( email )

Cape Town, Western Cape
South Africa

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
319
PlumX Metrics