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How can you make sure that you continue saving enough for your retirement?

  • Maintain a habit of saving
    This can strengthen your financial position in the future when you retire or even allow you to retire earlier than planned. The more put away in savings today, the greater your spending power can be in retirement.

  • Understand the features and benefits of your retirement product
    Knowing what you currently have will enable you to make an informed choice about your investment. For example,
    • The less tax you pay; the more money you have left to save. But to qualify for tax relief you need to be in right type of investment product. With products governed by retirement law, such as an RAs or your employer’s retirement fund, you can now invest up to 27.5% of your annual income (subject to an annual ceiling of R350 000) and enjoy tax relief on these contributions.
    • Termination charges: you may be tempted to change your current retirement product. This may expose you to termination charges which will take a long time to recover, in many cases you may not recover.
    • Risk benefits attached to your product: if your retirement product has risk benefits attached to it, by terminating the plan you will lose any life, disability or critical illness cover which will be more expensive to replace;
  • Get professional help
    It is important to consult a professional financial planner who will help you to determine your needs, and shape a complete financial plan based on your unique circumstances. Equally important is the sound advice that you’ll receive to help you navigate the tax laws covering retirement products – both before and after retirement.

  • Preserve your money
    When you move from one employer to another you might be tempted to take all of your retirement savings as a cash pay-out, but remember the tax! Also, saving enough money for retirement is hard enough. Dipping into your savings at any stage could set you back significantly.

    What should you do with your accumulated savings then? You have three options:
    • a transfer to your existing RA,
    • a transfer to a preservation fund or,
    • a transfer your new employer’s fund.

With a transfer to either an RA or preservation fund you don’t pay any tax, which will enable you to continue growing your savings.

Glacier Financial Solutions (PTY)LTD is a licensed financial services provider.
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