Low returns and longevity have had a major impact on retirement fund members' ability to reach their savings goals, the latest Alexander Forbes Pension Index shows. The index tracks the percentage of salary that retirement fund members born in different years are likely to achieve as a pension if they contribute a set amount each month and do not withdraw. Withdrawing your savings upon resigning before you retire is one of the biggest obstacles to achieving a reasonable income in retirement. But even if you do preserve throughout your working life, your savings may fall short of your target as lower returns and longevity affect how much you save and the cost of buying a pension at retirement. From inception of the index in 2002, it has tracked four hypothetical members of different ages, who were all assumed to be contributing 13.3% of their salary to their retirement funds. At inception they were set to achieve a pension equal to 75% of their salaries (their replacement ratio) if t...
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