Teachers, nurses, police officers, prison officials, members of the SANDF and intelligence services and other Government employees aged 55 to 59 can apply for early retirement between now and the end of September. Many will be tempted to take the packages to pay off their debts BUT before you rush to apply for the early retirement package, consider the following;

  1. South Africa has thousands of young, unemployed graduates so you might never find a job in the future. You must therefore ensure that you get good information and advice before you make this decision
  2. You will be taxed heavily if you cash your pension, know what the tax liability would be if you cash your pension. Of all the options you have, cashing your pension could result in you being poor in your old age
  3. Ensure that you don’t end up depending on your children as they are not going to be happy to pay “Black Tax”
  4. Ensure you fully understand the Advantages and Disadvantages of retiring within the GEPF
  5. Know how to minimise your Tax Liability if you want to retire out of the GEPF
  6. Also understand fully what you will lose by retiring outside of GEPF e.g. medical aid subsidy, funeral benefits, leave days
  7. GEPF is a Defined Benefit fund, get to know how this differs from a Defined Contribution fund because if you decide to retire outside GEPF, you would be joining a Defined Contribution Fund
  8. Compare GEPF benefits to what you would get if you decide to retire outside GEPF
  9. If your service period is less than 10 years, know how this will affect your pension. Is it even a good decision for you to take the package if your service period is less than 10 years?
  10. If your service period is more than 10 years, remember you have pre- 1998 tax benefits
  11. Know what to do to ensure that your pension lasts you for the rest of your life.
  12. Ensure you understand the difference between a Living Annuity and a Life Annuity. You don’t want to run out of your pension while you are still alive!
  13. Understand what happens to your pension if you die within GEPF. This is crucial if you have school going kids and other dependents
  14. Understand what happens to your pension if you die outside of GEPF

What you decide could make you poor in a short while or could see you enjoy a comfortable retirement. Get advice before you decide whether to take the early retirement package offer or NOT. Your decision is irrevocable and if you make a mistake now, you cannot correct it. For  good advice email info@thuthuka-sa.co.za or (services@thuthuka-sa.co.za)