Anyone earning a reasonable salary can easily build a comfortable retirement fund. But only six percent of South Africans will ever achieve this.

There are many reasons why people are underfunded for retirement, but the most obvious reason is that we don?t save enough. Experts agree that the other factors that contribute to the state of affairs is a combination of lack of knowledge, the quest for instant gratification and procrastination wrapped in large doses of denial.

Surveys reveal that very few people have serious retirement goals. In fact, considering the behaviour of most individuals it would be easy to assume that they actively try not to think about retirement.

Retirement can mean a new career

On a fundamental level they subscribe to the notion that they will be '18 until they die'. Let's face it, if we peel away the propaganda about retirement being a goal that we all should work towards, we will soon realise that, at best, it's not what it's cracked up to be and it?s the beginning of the end at worst. The good news is that retirement does not have to mean endless bridge sessions and book clubs. Retirement can mean a whole new career and sense of purpose, if we reframe it in the correct way.

The trend towards enabling second careers for their senior staff is already evident in corporations in the US and the UK. More and more companies have seen the folly in putting their experienced staff out to pasture. The cumulative years of experience and intellectual capital that they have is far too valuable to cut loose.

Now companies are favouring phased retirement. This means that some older staff can work less hours, but still be available for mentoring and consulting. This is a mutually beneficial scenario as companies get to keep their valuable resources for less money and these staff members get to reduce their hours and still earn an income. This means that they will not have to draw down on their retirement capital. Given the fact that people are living longer this is a massive benefit.

What if you left it too late?

This is well and good for people who have saved, but what about people who have left it until the 11th hour to save?

The fact that we are living longer and have healthier lifestyles or at least access to the knowledge that will help us to live longer, we now have a little more time to save. But this does not mean that we can relegate saving to the back seat. We still need to save for 20 to 30 years in order to secure a retirement. The old way of thinking was that we needed to save 15 to 20 percent of our salaries for 20 to 25 years to secure a retirement. So according to the rules of thumb if we started saving at 35 and stopped at 55, we would have accumulated almost enough to retire at sixty.

This no longer works because these figures are based on a life expectancy of only another 20 years after retirement. If we live past 80 these funds will not last. In fact, it is not out of the realms of possibility that many more people will live to see 100. What then?

Article continues on page two; Formula for working out how much you need to retire on page three...