Talk of the Town

What to know about preservati­on funds and why you may need one


You’ve just landed a new job and handed in your resignatio­n and must now move your retirement savings (in a pension or provident fund) from the employer you are leaving.

Obviously, you want to protect and grow these hardearned savings.

Preservati­on funds offer one of the best solutions to do so.

Your existing retirement savings need to be cared for even while you continue to work and build more retirement savings with your new employer or through your private retirement annuity.

Remember to think carefully before you “steal” these savings from your future retirement by cashing them in now.

Whenever you have the option to withdraw from an employer’s approved pension or provident fund, you can transfer your withdrawal benefit to a pension preservati­on fund or a provident preservati­on fund.

Jabulani Sibanyoni, Business Developmen­t manager at Glacier by Sanlam, explains what you need to know:

What is a preservati­on fund and how does it help you?

Preservati­on funds offer a flexible way of retaining and growing your retirement savings when you leave an employer.

They were specifical­ly designed for this exact purpose, namely to help you protect and grow your retirement savings when you change jobs.

In simple terms, a preservati­on fund is a type of retirement savings fund that focuses on the growth and protection of savings that may no longer be held in an occupation­al fund (pension or provident fund).

Glacier Personal Portfolios Preservati­on Funds offer the following benefits:

● Continued growth: Your retirement capital is preserved and may continue to grow.

There are various investment options on the Glacier platform to help grow the capital.

At retirement, you can easily transfer your retirement savings to a retirement income product, such as a living annuity or a convention­al life annuity.

● Protection: Your retirement savings in the preservati­on fund will be protected against creditors.

● Tax efficiency: No tax is payable on the growth of your capital in this fund (interest, dividends or capital gains).

● Access to your money: You can choose when to retire from this fund as long as your chosen date is after age 55.

You can make one withdrawal before retirement.

Though a withdrawal may not be advisable, you may withdraw all your money or part thereof.

Confident investing for retirement

“The Glacier Personal Portfolios Preservati­on Funds offer you continuity, protection, tax benefits and access to your money,” says Jabulani.

“With a minimum lump sum of R100,000, you can invest for growth in a way that suits your unique financial circumstan­ces and tolerance for risk.”

Be cautious, though, he says. It’s not ideal to make any investment decision without the help of an appropriat­ely authorised financial adviser.

Your retirement savings are a critical step to a confident future and should last as long as you live. Investing your hard-earned savings must be done with the help of a profession­al.

Contact Sticks Stiglingh at Strata BlueStar on 046-6244948 or 071-612-7339 or sticks@stratablue­ for profession­al advice.

– Glacier Financial Solutions (Pty) Ltd is a Licenced Financial Services Provider.

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