Finweek English Edition - - MONEY -

Michele On­g­ley, head of in­sti­tu­tional b u s i n e s s d e v e l o p ment a t 10 X In­vest­ments, says re­tire­ment fund sav­ings can be in­vested in ei­ther com­pul­sory or dis­cre­tionary prod­ucts.

Com­pul­sory prod­ucts are the prod­ucts in which em­ploy­ees in­vest through their em­ploy­ers. She says this op­tion is by far the cheap­est for em­ploy­ees. In ad­di­tion to group risk benefits like dis­abil­ity and death cover, the em­ployer also con­trib­utes to­wards the em­ployee’s re­tire­ment fund sav­ings.

On­g­ley adds em­ploy­ees should en­sure their con­tri­bu­tion rate is max­imised and should al­ways con­trib­ute the high­est pos­si­ble per­cent­age. She says em­ploy­ees are of­ten too con­cerned with the take­home value of their pack­age and opt for t he l ow­est con­tri­bu­tion rate as a re­sult. “As lit­tle as a 2% ad­di­tional monthly con­tri­bu­tion, which is of­ten less than R1 000 in take-home pay, can add 12% more money at re­tire­ment.”

Those who aren’t for­mally em­ployed, who are em­ployed by a com­pany that

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