Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


How to save up for retirement

24 September 2015, 11:28Charné van der Walt

Saving for retirement is important but how you go about it is a challenge. There are so many products and it’s not so easy to decide between them.

In this article, I will be looking at three of the products that you can use to save for your retirement namely a Pension Fund, a Provident Fund and a Retirement Annuity.  

A Pension or Provident Fund is what an employer offers his/her employees to help them save for retirement.  Not all employers offer this and if not, or you want to save even more on your own, you can take out a Retirement Annuity.

Let’s first look at a Pension and Provident Funds.

In many ways they are similar, but one important difference is how they pay out when you retire:

•    With a Pension Fund, you can get up to a third of the money in cash when you retire (and some of it may be taxed) and the balance you have to invest in a certain way to give you a monthly income.
•    With a Provident Fund, you can get the full amount in cash (and some of it may be taxed) and then decide yourself where and how to invest so you can earn a monthly income.

If your employer offers you membership in either a Pension or Provident Fund, it is normally compulsory for you to join. Sometimes the employer will decide what portion of your salary will be saved (e.g. 10%), but sometimes you are given an option (e.g. minimum 5% and maximum 12%). 

In most cases,  you can also decide how much risk you want to take with your savings. I will focus on what “risk” is in Part 3 of this series.  

As you save, your retirement savings account will increase. Sometimes the value will not increase for example when it’s not going well with the economy. 

The value of what you have saved, is generally referred to as the “Fund Credit”.

When you resign and you’re not yet 55 years of age, you can do one of the following with your Fund Credit:

1.    Take the full amount in cash (and possibly pay tax on it), which is not advised as you spend money that is meant for your retirement.
2.    Take part of the amount in cash (and possibly pay tax on it) and transfer the balance to  some sort of retirement savings plan.
3.    Transfer the full amount to some sort of retirement savings plan (no tax will be deducted).

When you resign from your current employer and transfer either part or the full amount as described above, you don’t have to pay tax and your money will continue to grow until you retire.

There are three types of retirement savings plans that you can have the Fund Credit transferred to, namely:

1.    To the new employer’s Pension Fund or Provident Fund (check this with your new employer);
2.    to a Preservation Fund,  which is basically like having your own “personal” Pension or Provident Fund”;  or
3.    to a new or an existing Retirement Annuity and if it’s a new Retirement Annuity, you can even add a monthly savings amount.  

Let’s now look at a Retirement Annuity, or sometimes called an RA. 

A Retirement Annuity is a good option for people who don’t have a Pension or Provident Fund as part of their salary package and want to save exclusively for their retirement. It’s also a good option if you have a Pension or Provident Fund but want to save even more. When a Retirement Annuity pays out, it pays out very similar to that of a Pension Fund which I described earlier.

When you take out the policy, you must decide at what age the policy will pay out to you. This age is called the “maturity age” and in most cases you can choose an age between 55 to 70 years.

The minimum age is 55 years so that you are not tempted to use the money before you have actually retired. You won’t have access to the money before you’re 55 unless you become permanently medically disabled.

Try to start saving for your retirement from a young age. A broker or the companies that offer Retirement Annuities, will guide you as to the minimum amount you can start with.

Try and save at least between 10% and 15% of your gross salary. Gross salary means your salary before any expenses or tax are deducted.

- Woman24


Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...