How your savings grow depends on what you invest in. If you put your money in the bank there is no risk and your money will grow at the interest rate. If you invest in the stock market you have the potential for much higher returns but also much higher risk.

The longer you invest for, the more risk you can typically afford to take.

The five risk profiles in our savings calculator all invest across equities, bonds, cash and offshore investments in varying weightings. The more conservative risk profiles have less equity exposure while the more aggressive profiles have greater equity exposure.

The estimates of how your money may grow in a NORMAL/AVERAGE market environment and a POOR market environment are based on historical data and an assumption that South African inflation will be on average 5.25%.

This chart is merely an illustration. This calculation does not take into account fees and taxes.

Rising inflation destroys the buying power of your money. So essentially what you can buy today with what you have in your wallet will not be able to buy you the same goods in one year’s time. The goods will have become more expensive. So your savings need to grow at inflation + some amount to maintain buying power. SIM’s long term inflation forecast is 5.25% which is what we have used in this calculation.

Investing in stock markets is risky. Only you can decide how much risk you can take. That is why you must choose your risk profile carefully so that you invest in a fund which can limit your risk in line with your profile. See our risk profiler tool.