Financial fitness
Why saving for you retirement is important
Most of us start working in our early twenties, full of dreams and plans for a bright future. For most of us this is the first real encounter we have with financial planning and having to be responsible for our finances.
During our school years most of us do not deal with financial matters. We are only exposed to basic education but not taught how to manage our money. As adults, we have to learn as we go along and, without being taught basic financial literacy, it often leads to a long and complicated relationship with money.
We learn that saving for retirement is essential. We come to realise that on our payslips there is a portion of money allocated to retirement savings.The aim of this is to ensure that we will have money to assist us during our retirement.
But when we are young retirement seems like a lifetime away and there are more immediate needs to be met. Ideally, we should be receiving advice that tells us that it is always best to start saving for retirement as soon as one starts earning a salary.
Without financial education there's the risk of getting ourselves deep into debt and to start thinking about accessing our retirement money.The apparent accumulated large sum locked in our retirement fund can surely assist us in getting out of this immediate and looming ‘temporary fix' called debt? We start thinking of ways to get our hands on this money by, for example, tendering our resignation.
The option to cash out a pension and take a lump payment can be tempting. But it is far better remain in service and continue to build our retirement nest egg so that we can rely on pension benefits that will largely keep pace with inflation for the rest of our life after retirement. This can only happen if we belong to defined benefit funds such as the Government Employees Pension Fund (GEPF).
The GEPF affirms that the wellbeing of all of its members and pensioners is the reason why it exists and encourages members to save while they are still working so they can be adequately provided for in retirement.
Benefits of retiring with the GEPF
The GEPF is a defined benefit fund, which means that the pension benefits are paid as an annual pension (payable monthly) that is guaranteed for life.The GEPF has a solid track record when it comes to safeguarding the value of active members' retirement savings and protecting pensioners against inflation.
The benefits of retiring with GEPF include a lifetime pension for the pensioner and access to benefits such as spouse/lifetime partner pension, orphans and qualifying children with disabilities and the funeral benefit which do not come from the members' pockets. Furthermore, members who resign lose essential things such as medical benefits.
The primary role of the GEPF is to protect the wealth of its members and pensioners by safeguarding their retirement benefits through proper administration and prudent investment.The GEPF has paid pension increases that largely compensate pensioners for inflation and, where necessary and affordable, catch-up on increases too.
Saving for retirement is essential if we want the freedom to enjoy our retirement years.