How much do I need to retire?

Generally, you should try and save enough money to invest your retirement benefit and get a pension equal to 75% of your fund salary at retirement. The pension should allow for yearly increases so that your income is not affected by inflation.

The “10/11/12” rule estimates how much you will need to replace your salary at retirement with a pension of at least 75% of your salary before retirement:

  • If you want to retire at age 65, you would need a minimum lump sum of about 10 times your annual salary at retirement.
  • If you want to retire, at 60, you would need at least 11 times your annual salary.
  • If you want to retire even earlier, at 55, your retirement benefit would need to be at least 12 times your annual salary.

So, if you want to retire before 65, you will either need to pay more money into your retirement savings, or you will have to start contributing early.

What happens if I retire due to ill-health?

You can retire early on the grounds of ill-health, if you:

  • Become too sick to carry on working AND
  • Have not reached your normal retirement date BUT
  • Don’t qualify for a disability benefit AND
  • Are totally and permanently unable to do your job.

The benefit you get will be your fund credit.

What is ‘normal retirement age’?

This is the age members can retire. The rules of every retirement fund give the ‘normal retirement age’ of that fund. It usually ranges between 60 and 65.

Can I retire before normal retirement age?

You can, with your employer’s consent, take early retirement from age 55 if the rules of the fund allow it. You will paid out your fund credit, as with normal retirement.

If you choose to retire early, you will have less money saved than if you retired on your normal retirement date. This is because you will have less time to earn investment returns. However, this smaller amount of money needs to be enough for you during your retirement. Make sure you have saved enough before deciding to retire early.

Can I retire after normal retirement age?

With your employer’s consent, you can work after your normal retirement date if the rules of the fund allow it.

If your employer agrees to your late retirement, you will continue to contribute to the retirement fund. When you actually retire, you will get your retirement benefit in the same way as if you had retired at your normal retirement age.