Retirement adequacy goals provide an indication as to how much wealth is needed at retirement to provide for an adequate retirement income. These goals have design and strategy implications for social security systems and retirement funds and can be used by individuals to assess their retirement preparedness. Previous South African work[1]used a consumption-smoothing approach to estimate goals that would be sufficient to provide for the higher of the pre-retirement lifestyle or subsistence living.

 The aims of this research are to:

-          estimate goals from the most recent official South African data, the Living Conditions Survey; and

-          develop the methodology used in the estimation of retirement adequacy goals.

 In terms of the first aim, for goals to be useful for long-term planning purposes they should be stable over time. The estimated goals for US households have not been stable[2]. The South African methodology is different and tracking the result over time will provide an indication as to if it provides more stable estimates and hence may benefit researchers in other countries. In terms of methodological development, South African official data is cross-sectional and this paper proposes the use of XAID, a continuous version of Chi-Square Automatic Interaction Detection statistical technique, in order to control for the bias that cross-sectional data would otherwise introduce. In addition, this research considers different household compositions to the one- and two-adult households with full employment considered in previous South African research. This development recognises the reality that 71% of South Africans over 65 live in households of 3 or more and a considerable number of households do not have full employment[3].