Why do women need to preserve their fund benefits?
Deep inside every man is the knowledge that women are stronger, more clever and just all-in-all better than us. Men seldom admit it, but they know it.
What’s more is that women live approximately seven years longer than men do, which means that a woman aged 65 will need approximately 15% more than a man of the same age to provide the same pension for the rest of her life.
Women are also at greater risk of cashing in their fund benefits as they face more career interruptions. All too often the cash windfall of cashing in a pension or provident fund can make a career break more viable, giving a woman time to raise her family.
Before cashing in their funds, all clients must remember that any amount over R 25 000 will attract tax on a sliding scale with amounts over R 990 000, attracting tax at 36%.
This is a high price to pay, especially when you factor in that ANY amount withdrawn prior to retirement (even the taxable portion) will reduce the tax free amount that the you could have been entitled to upon retirement.
Add to the above, the loss of compound interest and future growth on these funds and it is clear that cashing in a pension or provident should be a last resort for any woman who takes her financial plan seriously. Let’s take some time to review your goals and your priorities (current and future) to see how we can keep your financial plan on track for those extra seven years!