Changing jobs? Explore the benefits of a preservation fund

23 August 2023

Understanding the impact

When you switch jobs, it's essential to understand the potential impact on your pension. Your new employer may have different pension policies, contribution rates, and benefit structures. Some employers may offer a defined contribution plan, while others may have a defined benefit plan. Understanding these changes can help you make informed decisions to safeguard your financial well-being.

Transferring your pension

If you have an existing pension plan, you may have the option to transfer it to the new employer's plan. Transferring your pension can consolidate your funds and streamline your retirement savings. However, it's crucial to assess the fees, investment options, and any potential loss of benefits associated with the transfer.

Benefits of a Preservation Fund

One alternative to transferring your pension is to consider a preservation fund. Preservation funds allow you to retain your accumulated retirement savings from your previous employer's pension fund while enjoying several advantages. They provide tax advantages, continued investment growth, and flexibility in contributions and withdrawals.

preservation fund calculator

Smart planning for a secure future

When it comes to retirement planning, taking a proactive and strategic approach is key. Start early, diversify investments, review and adjust your plan as needed, and seek professional guidance.

Taxation, Payouts, and Smart Retirement Planning

In addition to understanding the impact of changing jobs and the benefits of preservation funds, it's important to be aware of the taxation and payout process related to provident funds. When it comes to provident fund payouts, the timeline can vary depending on various factors.

Typically, the payout process takes time, and it's crucial to be patient throughout the procedure. Suppose you're wondering how long it takes for a provident fund to pay out. In that case, it's recommended to contact your provident fund administrator or HR department for specific information related to your situation.

Another aspect to consider is the tax implications when resigning from a pension fund. Understanding the tax rules and regulations governing pension fund withdrawals or transfers is essential. Depending on your jurisdiction and specific circumstances, you may be subject to tax on your pension fund when resigning. Consulting with a tax adviser or financial professional can provide clarity on the tax implications and guide you in making informed decisions regarding your pension fund.

comparison report living annuity retirement annuity

By being informed about the tax and payout aspects of a provident fund, you can better manage your retirement planning and ensure you're maximising your financial security. It's recommended to seek advice from professionals and utilise reliable resources to fully understand the specific rules and regulations governing your provident fund.

Retirement planning is a critical component of securing your financial future. Whether you're changing jobs, facing retrenchment, or preparing for retirement, smart planning is essential.

By understanding the impact of job transitions, exploring the benefits of a preservation fund, and following key retirement planning strategies, you can ensure a secure and prosperous retirement.

Preserve your money and take the smart approach to pension planning by contacting us.

10X Investments is an authorised Financial Services Provider (FSP number 28250). The content herein is provided as general information and is not intended as nor does it constitute tax, legal, investment, or financial advice as defined by the Financial Advisory and Intermediary Services Act, 2002.

The 10X Living Annuity is underwritten by Guardrisk Life Ltd.

10X Fund Managers (RF) (Pty) Ltd is an approved manager of collective investments schemes in securities in terms of Section 42 of the Collective Investments Schemes Control Act, 45 of 2002.

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