According to a recent survey, many South Africans are not prepared for the financial consequences of retirement. Although it is important to save for retirement regularly and throughout your working life, preserving your funds when changing employers should also be at the top your list of retirement-saving do’s.
The 2018 Sanlam Employee Benefits Benchmark Survey found that retirement fund members are still no closer to their desired financial outcomes, while retired members are unable to maintain their pre-retirement standard of living.
A recent survey by recruitment agency Kelly found that 47% of South African employees have been in their current position for less than a year. What’s more, 36% identified their longest tenure with an employer as one to two years. The majority (44%) of respondents said they have had two to three jobs since they entered the workforce, while 29% said they have had four to six jobs. Changing jobs is to be expected in today’s environment.
The simple principle: you work so that you can provide for your family and your lifestyle, and you save so that you will have an alternative source of income that will continue to provide for your family and your lifestyle when you are no longer working.
One of the biggest problems in South Africa is that people cash out their accumulated retirement savings when they resign.