Question:
I would just like to know if a good provident fund is enough for security in retirement or if I need to take out an RA or something like it? I am 31 years old.

Answer:
It depends how the fund is structured. Many people think that their company pension or provident funds are sufficient, but they often fall short of retirement objectives.

Often a company provident fund is made up of three elements: life cover, disability cover and investment. So the entire amount being deducted from your salary is not going solely to savings. Also, the fund is only as good as its investment managers.

Therefore it is in your interests to keep an eye on the returns the fund is achieving. Most experts recommend that you have additional savings outside of a company provident plan.

One of the biggest reasons for people not meeting their retirement objectives is due to the fact that they do not stay in one job for their working life. On average an individual changes jobs every seven years. Typically, accumulated pension fund savings are paid out and the recipient, instead of reinvesting the money, spends it.

Experts estimate that most individuals only have around seven years of retirement funds saved up. As always it is a good idea to enlist the help of a financial advisor to ensure that you are on track.