Moneyweb & 10X: Will you have enough for retirement?

Will you have enough for retirement? It is a simple question, but working out the answer means looking at more than just the balance on your retirement statement. How much you save, what you pay in fees, how your money is invested and how much income you eventually draw can all affect your retirement outcome.

In this webinar, Simon Brown was joined by Savela Gwele and Brett McKay from 10X Investments to unpack the retirement maths in plain language. They discussed how much income you may need, why fees matter, what to do with your retirement savings when changing jobs, how your investment strategy may need to evolve over time, and the different ways you can build more flexibility into your retirement plan. The underlying message was clear: there are several things you cannot predict, but there are also important factors you can control.

Key moments from the webinar

• 01:46: How much income might you need in retirement? The 70–80% replacement ratio explained.
• 05:23: Why fees can have such a significant impact on your long-term retirement outcome.
• 09:06: What to consider doing with your pension or provident fund when you change jobs.
• 12:16: How working longer, continuing to contribute and compound growth can boost your retirement savings.
• 13:18: Why reaching retirement does not necessarily mean becoming a very conservative investor.
• 18:05: Active investing versus index tracking, and why costs matter over long investment periods.
• 22:08: How tax-free savings accounts and discretionary investments can complement your retirement funds.
• 30:03: How much of your salary should you be putting towards retirement?
• 35:04: How fees, inflation, returns and your living annuity drawdown need to work together.
• 38:15: Whether you should start reducing investment risk as you get closer to retirement.

Start by understanding how much income you may need

One useful starting point is to think about your replacement ratio: how much of your current income you may need to replace once you retire.

The discussion used a guideline of around 70–80% of pre-retirement income. You may no longer be contributing towards retirement, your bond may hopefully be paid off and your tax position could change. At the same time, expenses such as healthcare may become more significant.

That means your retirement target should not simply be a large lump-sum number. A more useful question is: what income will I need my savings to produce, and what will it take to get there?

Fees are one of the retirement factors you can control

Future market returns and inflation are uncertain. Fees are different: they are something investors can actually investigate and compare.

The webinar showed how seemingly small differences in annual fees can compound into very different outcomes over a long investment period. This is why the discussion repeatedly returned to Effective Annual Cost, or EAC.

EAC is useful because it brings the different layers of investment costs together, including investment management, administration and advice costs. Rather than asking only what the investment management fee is, investors can ask their provider for the EAC and use it to make a more meaningful comparison between investments.

Changing jobs? Think carefully before cashing in

Changing employers is one of the moments when retirement plans can easily go off track.

If you leave a job with money in a pension or provident fund, one option discussed in the webinar is transferring those savings into a preservation fund rather than cashing them out. A preservation fund keeps the money invested for retirement while giving you more control over where it is invested and the fees you pay.

Cashing out does not only reduce the amount you have saved today. You also lose the future growth that money could have generated over the years still ahead of you. As the discussion put it, preserving your savings should therefore be one of the first options you consider when changing jobs.

Preservation funds: Navigating retirement savings when changing jobs

When you change jobs, what will you do with your pension or provident savings? One good option is a preservation fund, designed to help you preserve and grow your retirement savings. Read more

Retirement doesn't mean your money stops needing to grow

One of the more important misconceptions discussed was the idea that reaching retirement means moving everything into conservative investments.

Your retirement date is not the end of your investment horizon. If you retire in your 60s, your money may still need to support you for another 20 or 30 years.

That can mean maintaining exposure to growth assets even after retirement, particularly if you are using a living annuity. The right mix will depend on factors such as your drawdown rate, time horizon, tolerance for market volatility and overall financial position, but becoming too conservative can create another risk: your investments may struggle to keep ahead of inflation while you are drawing an income.

The same long-term thinking came through in the conversation about active versus index investing. Active managers aim to outperform the market, while index-tracking funds aim to capture the market return at a typically lower cost. Over a retirement investment horizon that may stretch for decades, both returns and the costs required to achieve them matter.

Don't rely on one retirement pot

Retirement planning also does not need to begin and end with your employer fund or retirement annuity.

The webinar discussed using investments such as a tax-free savings account and discretionary unit trusts alongside formal retirement products. These can provide an additional pool of capital and, importantly, more flexibility once you retire.

For example, a living annuity provides an income within prescribed drawdown limits, while discretionary savings can give you access to capital for an emergency, travel or another large expense without having to rely entirely on your retirement income. Building different investment pots can therefore give you more options later.

Your drawdown needs to work with your returns and fees

Once you retire, the question changes from simply “How much have I saved?” to “How much can I sustainably take from those savings?”

The webinar offered a useful way to think about it:

Fees + inflation + your drawdown should be less than the growth your portfolio generates.

Inflation is largely outside your control. Your drawdown and the fees you pay are not.

The discussion suggested that a drawdown of around 5–6% can be a useful general reference point, but there is no single percentage that works for everybody. Your age, investment mix, fees, income requirements and other sources of capital all need to be considered together.

The bigger lesson from the webinar is that retirement outcomes are rarely determined by one decision. Saving more helps. Paying less in fees helps. Staying invested for longer helps. Preserving your retirement savings when you change jobs helps. And making sure your eventual income is sustainable helps.

You may not be able to control markets or know exactly how long your retirement will last, but understanding the numbers you can control can give your savings a better chance of working harder for you.

If you want to understand whether you're on track for retirement, our consultants can help you work through your numbers and investment options. No fee, no pressure. Book a call here.