Alexforbes data shows 10% of retirees now on track

The proportion of contributing members of Alexforbes-administered retirement funds who are projected to retire with an income of at least 75% of their final salary rose from 6% in 2021 to 10% in 2025, according to the Alexforbes Member Insights 2026 report. 

This is a study of 1.1 million active retirement members’ data looking at more than 310 funds and 2 300 employers, and is considered representative of the local retirement industry.

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A “phenomenal” market performance in 2025 benefitted those who retired last year and members in retirement funds, says Alexforbes head of solutions enhancement Vickie Lange.

“The 6% figure from earlier editions of Member Insights became one of South Africa’s most widely quoted measures of retirement readiness.” 

She says the significant improvement to 10% shows that retirement outcomes can change. “However, the result must be kept in perspective.” 

Nine out of 10 contributing members are still not on track to replace at least 75% of their final pensionable salary, so there is considerable work to be done.

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Average contributions too low

The average retirement fund member contributes 11.2% of their salary to retirement, which is below what is required to earn 75% of one’s salary upon retiring, Member Insights 2026 reveals.

The gold standard for retirement saving is to put away 15% of one’s salary for 40 years in order to earn 75% of one’s salary at retirement, with an expected return of consumer price inflation each year plus 5% growth, says Michael Prinsloo, executive at Alexforbes Corporate Solutions. 

But the quantitative analysis of Alexforbes data – which is the largest of its kind – shows that people are not managing to save 15% of their salary.

Lange explains that if one only saves for retirement for 20 years, one needs to save 41% of one’s salary to earn a 75% replacement ratio – showing the importance of starting early.

If members only save 15% of their salary for 20 years, they will earn 27% of their final salary, while saving 15% for 30 years will have them earn 47% of their final salary.

2025 market performance improved member outcomes

The average amount of income that current retirement fund members are projected to earn when they reach retirement age is 46% of their final salary – an improvement from the expected projection of 40% in 2021.

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“We’re quite pleased to see that jump,” says Lange.

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Lange provided data to show how saving too little can lead to poorly funded retirement. 

In the actual analysis of 25- to 30-year-olds in the funds, those contributing between 10% and 12% of their salaries will earn 37% of their final retirement salary if they retire at age 60 and 45% if they retire at age 65.
The real-life 25-30 year olds contributing 14-16% will earn an expected replacement ratio of 45% at 60, which jumps to 68% at 65.
Actual 50-55-year-old members saving between 10% and 12% will earn a replacement ratio of 22% if they retire at 60 and 24% at 65. 

Why starting early matters: Contribution rates and replacement ratios

Source: Alexforbes Members Insights 2026

The report’s data also shows that, on average, people are retiring at 61. The norm in South Africa is usually 65.

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Ideally, people need to work and save for as long as they can, says Lange. 

“If they’re retiring early, it does have … a detrimental impact on their replacement ratio.”

On a positive note, the money staying preserved in retirement funds, rather than being withdrawn when people retire or change jobs, has risen to 52% of assets at the end of 2025, up from 44% in 2022.

This is due to complex factors, including the improved 2025 market returns. 

The increasing amount preserved could be showing that the two-pot savings programme that began in September 2024 may be increasing savings.

Two-pot legislation allows people to access a third of their contributions each tax year, and keeps two thirds saved away until retirement. But the Member Insights team needs about two more years of data to decide if this it is making a difference to how much is preserved in retirement funds. 

“The bottom line is more retirement savings is staying invested, and that’s a good thing,” says Lange. 

“We just don’t know if the improvement in preservation behaviour is a lasting trend or [if it is] just coincidental at this point in time.”

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