The direct effect that the interest rate has on the money which people have invested, in various schemes, has meant that pensioners are now earning less on what they have put away than ever before. The effect is a serious one and many analysts are asking the question; are our senior citizens being sacrificed for the sake of economic recovery.

An example provided by FNB- someone earning interest income of R5000 per month from a money market account 30 months ago is now only receiving R3 134. This amounts to a total loss of R1 866 per month, or an income drop of almost 40%. If you amplify these kind of facts to incorporate someone’s life savings and couple it with the statistic that only 1 in 10 people retire financially secure you will begin to understand that there are serious shortfalls in the financial security of our senior citizens.

The interest rates are the lowest that they have been in 10 years in order to create investment and opportunity, however the interests of our senior citizens have been overlooked in pursuit of this goal. The harsh reality is that pensioners are not able to find another source of income; they simply have to cut their standards of living even further. Meaning that roughly 9 out of 10 people are in various stages of financial distress throughout their retirement.

There are various measures that need to be taken and systems that need to be put in place in order to protect the aged and to cater for the changes in world economies. There should be a greater responsibility in the private sector in terms of making sure that retirement monies actually go to retirees as well as aggressive special benefits for pensioners. There are currently more people reliant on social grants than there are taxpayers in South Africa.

The last factor that should also not be forgotten is that of personal responsibility and education. Each person is personally responsible for their financial situation whether they are prepared for it or not. Retirees need to ensure that they receive adequate advice and act on it in a responsible manner.

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