Will your pension die when you die?

Do you know that some pension funds are set up such that when you, the pensioner dies, the pension dies with you? Imagine working for 40 years or so and if you die soon after going on pension, then your pension also comes to an end! Most of us would want to leave our pension to our children or even our grandchildren.

This came as a shock to MaDube’s kids [not her real name]. MaDube died at a tender age of 61, just after she had gone on pension. Her husband had died earlier. She had worked as an educator all her life. Although she married early, she only had her children much later. As a result, her last 2 kids were just starting out at university when she passed on. I explained to her children that there is nothing anyone could do for them. This then prompted me to write this article because it is possible to structure your pension such that it does NOT die with you when you die.

So if you are about to go on pension, it is best to see me BEFORE you sign any papers. Below are some of the critical questions you need to ask yourself;

  • How much pension you will get whenyou go on retirement? I can help you with indicative calculations
  • How can you minimise the stress of waiting for your first pension check? Sadly, it can take up to 6 months before you receive your first monthly pension
  • How do you minimise tax when you go on pension?
  • How do you ensure that you get as much monthly pension as you can while at the same time leaving behind some money for your loved ones, if that is what you wish to do?
  • Do you want to receive a monthly pension and also leave your full pension amount as a lumpsum to your children? What are the pros and cons of doing this?

With only 6% of South Africans affording to retire comfortably, how can you make sure that you and your children retire comfortably?
If you are grappling with any of the above and you need a financial advisor to help you, drop me an email

If you ask me, the best time to start planning for your retirement is with your first salary check so don’t feel you are too young to speak with me about your retirement planning

Share this knowledge with your loved ones