Close Menu
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation

Newsletter

Get the financial tips, offers and more

What's Hot

Critical Questions About Funeral Cover

September 19, 2024

Mortality Benefits

September 19, 2024

How do You choose a Medical Plan?

October 2, 2023

3 increases in medical rates in 17 months = 27%!

Sponsor: Ubuntu CapitalUbuntu CapitalOctober 2, 2023
Thursday, May 8
Facebook X (Twitter) Instagram
Money 101
  • Business
  • Lifestyle
  • News
  • Wealth Creation
Money 101
Home»Biz News»Plan Early for Retirement
Biz News

Plan Early for Retirement

EditorBy EditorFebruary 20, 2014Updated:October 5, 2016No Comments3 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp VKontakte Email
Share
Facebook Twitter LinkedIn Pinterest Email

Retirement planning is vital for those who want to live a comfortable and enjoyable life when they retire. It would definitely be wise to plan early for retirement.

Every year more people are becoming aware of the financial implications that come with not saving for their retirement. The biggest problem is that nobody thinks about retirement when they are younger. This can be detrimental to your retirement vision. By saving early, you can easily double your retirement savings by starting in your early 20s as opposed to in your late 30s.

Retirement planning consists of three types of policies…

A Retirement Annuity

This is a policy taken out by an individual (not through an employer) to help them save towards their retirement. It can either be issued through a financial advisor or directly through an investment company and can only be withdrawn at the selected retirement age (either 55, 60 or 65 years old).

Pension

A pension fund refers to when a company contributes towards an employee’s retirement savings. The company may either opt to pay the full amount or split the monthly contribution between the employee and the company. The funds may only be withdrawn upon the selected retirement age (as above).

Provident

A provident fund is similar to a pension fund where the employer contributes towards an employee’s retirement savings plan. The difference with a provident fund is that you may transfer your savings over, should you ever leave the company and move to an organisation that uses a different investment or insurance company.

Nowadays, transferring of provident funds from one company to another (called a Section 14 Transfer) is becoming more regulated. It has become the responsibility of the existing investment company or a financial advisor to advise an individual whether it is in their best interest to transfer their savings to a new organisation or whether they will end up losing money.

It is important to note that provident funds are likely to be done away with in 2015, and a new rule will be implemented so employees can no longer withdraw funds before retirement age. This is being done to protect the millions of citizens who cash in their policies early, hence leaving themselves and their families desolate later in life.

This has been found to be more prominent in the lower income groups, where people are in need of money. They are finding that the monthly R1 200 retirement grant given by the Government, is not sufficient enough to sustain them.

Retirement lasts for 40 years – this is almost as long as a person’s working career … Makes you think, doesn’t it?!

Share. Facebook Twitter Pinterest LinkedIn Tumblr WhatsApp Email
Previous ArticleUnit Trusts – Real Savings Account
Next Article Insure your Vehicle at the Correct Value
Editor

Related Posts

Critical Questions About Funeral Cover

September 19, 2024

Mortality Benefits

September 19, 2024

Razer Partners with Clearbot to Clean Oceans the Smart Way

June 8, 2021

Retirement Annuities Explained

June 7, 2021
Our Picks

Retirement Annuities Explained

June 7, 2021

What is the Difference Between Compulsory and Discretionary Savings?

June 8, 2021

Who may and how do you apply for business rescue?

May 31, 2021

Momentum Health Increases 2022

October 28, 2021

Subscribe to Updates

Get the financial tips, offers and more

Don't Miss
About Us
About Us

Money 101 is your source of Personal, Financial, Business and Lifestyle educational articles which is brought to you by Adarna.

Visit Adarna: Adarna.co.za
Privacy Policy: Click to View

Our Picks

Momentum Health Increases 2022

October 28, 2021

Discovery Medical Aid Increases 2022

October 28, 2021

What is the Difference Between Compulsory and Discretionary Savings?

June 8, 2021
© 2025 Brought to you by Adarna.

Type above and press Enter to search. Press Esc to cancel.