There are three different ways that South Africans can save for retirement:

1. Pension Fund
Your company works with you to save for retirement and they even match your savings.
A pension fund is normally instituted by the company that you work for. The bigger the company the more they will invest into your pension. The company puts away a percentage and you put away a percentage into your pension fund. This is normally 5% – 7.5% and the company will do the same. This percentage, however, can be changed by your company from time to time. However, the company is not obligated to match the amount that you put in every month. It is a voluntary thing that when the company decides whether they are setting up a pension fund they decide how much they want to put in.

Nobody can beat time in the market spent saving. The earlier you start putting money away the better. Save when you are young and you will reap the rewards when you are older.

2. Retirement Annuity
You save for retirement yourself. It is good for entrepreneurs. Parents can take out a retirement annuity for their children with a minimum premium of R200 a month. You can even start saving once your child is born.

3. Provident Fund
The company saves for retirement for you and you do not have to contribute anything. Death and disability cover can be added to both pension and provident funds.

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Vangile Makwakwa
April 2015