Withdrawing from your retirement or pension fund
Don’t pay your debt through your retirement or pension funds.
R10000 withdrawn today from your retirement or pension fund may look insignificant but will affect the compounded interest attached to these forms of savings. For example R10000 with a compounded interest of 10% is a lot of money after 10 years. Therefore even though R10000 looks small today, it is a growth part of it that you will lose.
Also, you will incur unnecessary tax implications due to those early withdrawals and it could negatively affect your investment growth.
Unless you have exhausted all other available options, try to leave your retirement or pension savings alone for the future.
Another tip: When you change jobs, don’t cash your retirement or pension fund from your previous job. Carry it over in totality to the next fund with the new employer. Please don’t eat your investments growths. Although it is tempting to do it, don’t do it!
JOIN US ON THE 25 NOVEMBER 2017 TO LEARN MORE AS WE SPREAK ABOUT FINANCES
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