PEOPLE are struggling to live from month to month on their salary. It is unlikely that their pension will ever be as high as their monthly earnings.

PEOPLE are struggling to live from month to month on their salary. It is unlikely that their pension will ever be as high as their monthly earnings.

We all hope to retire in comfort one day. Statistics show, however, that only 4percent of all South Africans retire in comfort; 12percent simply get by; 33percent have to reduce their lifestyle dramatically and an alarming 51percent retire in circumstances that force them to supplement their income or rely on family members for financial support. South Africa is not a welfare state and the basic pension does not provide sufficiently for retirement.

It is virtually impossible to explain to a 20-year-old why they should start thinking about retirement. Think back to when you were in your 20s. What was paramount - buying things or saving for retirement?

Retirement planning and wealth creation are two very different strategies. While it is true that creating wealth and amassing funds will provide many generations with their financial requirements, it is important to remember that most people will never achieve this and will have to live off what money they have managed to save during their working lives. Hopefully, they will not outlive their capital.

The financial planning aspects have to start 30-45 years before retirement in order to have enough income to see you through your retirement years. If you are older, do not be put off, but do realise that your situation probably needs urgent assessment. It is better to take control of your future now, than just leave it for another one or two years. I like to divide life into four stages:

l First 17 years - education

l 17-34 years - further education and finding out exactly what you want to do with your life

l 34-51 years - concentrating on your career and making changes that improve your situation

l 51-68 years - planning for retirement

In the first three stages, you can afford some risk, but in the last stage before retirement, you should take no more risks. All too often, business ventures fall down in stages 1 and 2, but we are then able to pick ourselves up and start again. But by the time you reach stage 4, you do not want to take chances with the capital you have built up to see you through the last years of your life. Statistics show that men and women are living quite a few years longer than in the past, with men to age 82 and women to age 86, due largely to advancements in medical technology.

I write regularly about this subject because it is important that all of us understand how quickly the years go by and if you haven't made sufficient provision for retirement, then now is the time to start or to add to what you already have. Contributing to a company pension fund is not enough. You will need to have additional saving plans in place.

l The writer is a director of Pioneer Financial Planning. Visit