“One Small Habit That Built Half My Retirement”

Feel free to reach out to PSG Wealth Adviser  Lorika Steyn directly.

When Should You Start Saving for Retirement?

Let me take you back to 1999. I had just landed my first job as a student teller at a bank. My monthly salary? A grand total of R1 500. It wasn’t much, but it felt like the world to me. Like many young adults, I was just trying to make ends meet—paying rent, grabbing a bite with friends, and enjoying the occasional night out. Retirement? It wasn’t even on my radar.

But here’s the golden rule I wish someone had made crystal clear to me back then:

Start saving 15% of your income before tax from your very first paycheque.

Yes, even when you feel like you’re scraping by.

But here’s the truth: over 40 years, that small, consistent saving habit could grow into a retirement pot large enough to replace up to 75% of your income at retirement. And you know what drives that incredible growth?

Compound interest

Here’s a mind-blowing fact:

Up to 50% of your total retirement benefit will come from the first 10 years of savings.

Yes, half your retirement income could be thanks to those small amounts saved in your 20s and early 30s.

On the flip side? If you delay saving for retirement until your 30s or 40s, you’re not just losing a few years—you’re potentially halving your retirement benefit. Or you’ll need to work an extra 10 years to make up for lost time.

Here is a clear example comparing two savers, illustrating the power of starting early with gradual increases versus starting later with higher initial contributions:

Example: Saving from Age 25 vs. Starting at Age 40

Estimated Outcomes:

•   Anja’s total retirement fund at 65: Approximately R11 million

•   Carol’s total retirement fund at 65: Approximately R4.7 million

What this shows:

•   Although Carol contributes twice as much monthly, starting 15 years later means they accumulate less than half the retirement savings of Anja.

•   The early start allows Anja’s money to grow longer and benefit more from compound interest and the gradual increase in contributions.

•   Anja’s habit of increasing contributions by 5% annually also means their savings keep pace with inflation and income growth, making the savings more effective over time.

Key Takeaway:

Starting early and benefiting from higher investment returns dramatically improves your retirement savings, even if initial contributions are smaller. The power of time combined with a strong growth rate and consistent increases in contributions is the most effective way to build a substantial retirement fund.

So, whether you’re earning R10 000 or R100,000, the lesson is the same:

Start now. Stay consistent. Let time and interest do the heavy lifting.

It’s not about how much you earn. It’s about how early— and how consistently—you start saving.

Your future self will thank you.