Consider implications before taking pension
WITH the government poised to remodel pension payouts on March 1 next year, many working people are in a quandary with regard to their savings within current South African pension schemes. Many are hell-bent on jumping ship by resigning current jobs so as to realise their long-held dreams of one day being paid a huge lump sum on retirement, normally between R½-million and R1½-million, at the end of work period payout, making them instantly cash fluid.
This sounds like a lot of money initially, yet time and expenses erode these gains so fast that at the end of the day they are left with insignificant monthly cash payments. These are not able to carry the day in today's expensive living needs cycle we are tied into by our penchant for consumerism
If these lump sums are invested wisely then, and only then, do people reap better rewards on their pensions proper. Now the government wants to see to it that people maintain better and higher salaries in old age by keeping pension contributions locked in until retirement proper, irrespective of job change as well!
The government wants pensioners out of poverty and hardship in old age, thus the envisaged pension scheme changes are more on the lines of what is happening in Australia and Canada. The government envisages a 25% payout at retirement and the rest invested with a reduced taxman-take on these retirement salaries, enabling the aged to live decent lives and still be able to travel and see the places one only can dream of as ordinary workers pinned in by exorbitant living costs.
Most people seem to want to opt for resignation!
I have used this method myself in between jobs and paid off pressing debts.
I know of countless others who have done exactly the same.
Yet I sit without a pension, unemployed at 55 years of age! No-one's fault but my own, please note!
Yes, it is your right to cash out.
Yet I beg you to ponder your actions prudently and give this the thought it deserves, people out there, before you jump ship!
Empower yourself in this regard and make informed choices.
More talk shows, workshops and deep analysis in this paradigm pension shift is needed in all mainstream and social media, to speak to this pension change specific question here in South Africa now before March 1 next year!
Otherwise people of working age will flood our already flooded streets of unemployed peoples here in Nelson Mandela's South Africa.
May sense prevail in future generations.
Denzyl Harper, Korsten, Port Elizabeth
