4 ways preservation funds can help grow your money

Switching jobs can be invigorating. The prospects of a brand-new career, a bump in your salary, the possibilities of what you might achieve… But this exciting phase can also hold some tricky dilemmas. For instance, what should you do with the savings accrued in your previous employer’s approved pension or provident fund?

Firstly, resist the temptation to withdraw the money! You’ve worked hard to build these savings for your retirement – don’t let them go to waste by cashing in. Moving your savings to a Pension or a Provident Preservation Fund can help them continue to grow. Let’s explore:

Switch and save

Many employers offer occupational funds to help you set aside savings for retirement. Should you change jobs, these savings can be withdrawn or moved to an approved fund. This can either be an existing fund with your new employer or a personal Retirement Annuity. A preservation fund comes in if any of these options are unavailable as you use it to “park” your money until you need it. It is specifically created to help you protect and build your savings for your retirement in a flexible way.

Retire on your terms

Trying to catch up with your retirement planning at a later age is more difficult than starting early. According to an article by Old Mutual, “your retirement savings in the first 10 years of your career can form up to 50% of your pension. Most people do not realize this and neglect to start planning for retirement as soon as they get their first jobs. Losing out on 10 years’ compound interest has a huge knock-on effect which is sadly only felt much later in life, as it could halve your retirement income.”

Retirement vehicles remain the most ideal form of investing, so it’s worth starting early and preserving your funds when changing employment to maximize the compounding effect of returns over the long-term.

Preservation funds offer you the following benefits:

  • The preservation and continued growth of your retirement capital
  • The ability to easily transfer your retirement savings to an annuity product when you retire
  • Protecting your savings against creditors
  • You don’t have to pay any tax on the growth of your retirement capital in a preservation fund
  • Reasonable access to your money (the specifics will depend on your chosen preservation fund).

Invest for your retirement with confidence

Managing your retirement savings can be stressful. mCubed Group is an Independent Fund Administrator that can help advise you on the best ways to grow your savings and invest in a comfortable future retirement. Members, clients, and participating employers of our retirement funds enjoy access to the best investment administration and advice, excellent service, and complete transparency for the best long-term results. Our fund-appointed FAIS-accredited financial advisors also help you to enjoy a safe, financially sound, stress-free, and prosperous retirement. Get in touch today!