In this funded-account model, a worker who starts at 25 on R30,000 a month, contributes 12 percent, and earns a 3 percent net real return exhausts a pension equal to 60 percent of final salary around age 70 if retirement begins at 60 and life lasts to 90.
Evidence status: Modelled. Sensitivity: high. Depends on GSX:POP-001:A01, GSX:POP-001:A02. This is one modelled path, not a forecast and not South Africa's current retirement system. Amounts are constant 2026 rand before personal income tax. A value below zero is a funding shortfall, not literal bank debt. The manuscript also shows that a higher contribution, a higher return, or a later retirement age can support the same target.
C01
Related questions
Under what conditions does retirement at 60 remain financially viable?
How do ageing and lifetime finances constrain retirement at a fixed age?
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Assumptions
Assumptions
These are the registered model assumptions. A result stays conditional on the ones a claim names.
A01Representative funded saverThe funded account starts at age 25 with a gross salary of R30,000 a month, continuous employment, and amounts in constant 2026 rand before personal income tax. Salary grows with productivity.30000 constant 2026 rand per month, starting gross salary
A02Age-60 funded pathThe age-60 headline path contributes 12 percent, earns a 3 percent net real return, retires at 60, and is tested against life to 90. The target pension in the exhaustion path is 60 percent of final salary.12 percent of salary contributed
A03Public pension lensThe public model is a pay-as-you-go lens, not a replica of South Africa's current tax and grant system. Working life begins at 20, 80 percent of working-age people contribute, and migration is excluded. Survival to the scenario age is rectangular.80 percent contributor coverage
A04Payroll comparison lineA required pension-only payroll rate at or below 20 percent is the manuscript's comparison ceiling. It is not a legal or universal maximum.20 percent of covered payroll
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Model
Model
The registered model statement. It is a scenario model, and the manuscript remains the full specification.
M01Two retirement machinesOne lens is a funded individual account. The other is a pay-as-you-go public pension aged for 260 years so each fertility and longevity pair can settle. The manuscript uses them as lenses. They are not a literal replica of one South African institution.GSX:POP-001:M01
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Results
Results
Modelled scenario results. They are not forecasts.
R0170 age at which the 60 percent pension is exhaustedFor the age-60 path, a pension equal to 60 percent of final salary is exhausted around age 70 when life lasts to 90. The modelled pot at retirement is R3.25 million.Start at 25, R30,000 a month, 12 percent contribution, 3 percent net real return, retire at 60, live to 90
R0227 percent of final salary supported through age 90Under the same age-60 and age-90 assumptions, a 12 percent contribution with a 3 percent real return supports only about 27 percent of final salary for life.Age-60 retirement, life to 90, 12 percent contribution, 3 percent real return
R0342 percent of covered payroll, ageing-squeeze caseThe public model needs an 18 percent pension-only payroll rate in the short-retirement case, 42 percent in the ageing-squeeze case, and 65 percent in the century-life stress case.Public pension lens, three demographic stress cases
R0471 retirement age when longevity is 90With fertility at 1.7, 80 percent coverage, a 40 percent public benefit, and price indexation, a payroll rate at or below 20 percent requires retirement near 71 if longevity is 90, 75 if it is 95, and 79 if it is 100.Public lens held at or below the 20 percent comparison line
Sensitivity
High · 3
Moderate · 0
Low · 0
Limitations
This is one modelled path, not a forecast and not South Africa's current retirement system. Amounts are constant 2026 rand before personal income tax. A value below zero is a funding shortfall, not literal bank debt. The manuscript also shows that a higher contribution, a higher return, or a later retirement age can support the same target.
The replacement map holds salary growth at 1.5 percent real and indexes the pension to prices. A 60 percent target in the manuscript requires a much higher contribution, a higher return, or a later retirement age.
These are modelled rates for one pension promise. They are not estimates of South Africa's current tax system. Rectangular survival and the exclusion of migration make the longevity stress easy to read and deliberately stark. The 20 percent line is a comparison ceiling chosen by the manuscript, not a universal law.
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Claims
Claims
Each claim names the assumptions it uses and the limitation that travels with it.
C01GSX:POP-001:C01In this funded-account model, a worker who starts at 25 on R30,000 a month, contributes 12 percent, and earns a 3 percent net real return exhausts a pension equal to 60 percent of final salary around age 70 if retirement begins at 60 and life lasts to 90.Modelled · high sensitivity
C02GSX:POP-001:C02Under those same age-60 and age-90 assumptions, the account supports only about 27 percent of final salary for life. It does not support a 60 percent replacement at a 12 percent contribution and a 3 percent real return.Modelled · high sensitivity
C03GSX:POP-001:C03In the public-pension lens, the required pension-only payroll rate is 18 percent in the short-retirement case, 42 percent in the ageing-squeeze case, and 65 percent in the century-life stress case. Holding fertility at 1.7, coverage at 80 percent, and the benefit at 40 percent with price indexation, a rate at or below 20 percent requires retirement near 71, 75, or 79 as longevity rises from 90 to 100.Modelled · high sensitivity
Sources and reproducibility
The PDF and complete Markdown source are both published.
Full manuscript: 3 356 words across 23 indexed headings. Source checksum: 5e3311aa2ada…. Code recorded: yes. Data recorded: yes. Environment recorded: no. Published files: 3. the published statement does not rely on a recorded random seed A public code repository is not published.
