To protect your financial future, think twice before you cash in your retirement savings
AS SOUTH Africans face increasing economic challenges and rising debt levels that are becoming more costly to service, the temptation to cash in retirement savings when resigning or changing jobs is stronger than ever. For some people, this isn’t driven by a need for cash, but rather because the high interest rates lead them to believe they can earn higher returns by investing the money in a high-interest account.
However, there are many reasons to avoid giving into this temptation to withdraw your retirement benefit, or taking the risky step of resigning just to access your retirement savings.
Robbing young Peter hurts old Peter
The first, and most obvious of these, is that while cashing out your pension benefit may provide you with a lump sum in the short term, you will miss out on the potential growth of that money in the coming years.
By spending the money now, instead of keeping it invested for retirement…
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