80% of accessed pension lump sum misused – experts
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Chuks Udo Okonta
About 80 per cent of people who collected pension lump sum at retirement never successfully used the funds for the intended purpose, experts have said.
One of the experts, a pension guru said many retirees clave for lump sum even when they never needed the funds.
According to him, when his mother retired, she sought his counsel if to collect the lump sum? He noted that he advised her not to collect the fund, but she went ahead to collect the fund and for the past 10 years, the fund has been in her bank account without necessarily putting it to use.
He submitted that most retirees just follow the band wagon effect in accessing lump sum and admonished retirees not to access the fund if they don’t need it.
Another pension expert said the public outcry on low monthly pension benefits often stem from reduction in Retirement Savings Account (RSA) balance due to access of lump sum by retirees.
He encouraged retirees to secure their funds and ensure they do not depilate the funds through unnecessary withdrawals, such as lost of job benefits benefits and lump sum payment.
The expert stated that an enriched; sustained and regular pension benefits payment is necessary for a comfortable retirement lifestyle.
Another expert narrated how a retiree was defrauded of her lump sum. According to her, the retiree have accessed the lump sum, was approached by individuals who pledged to introduce her to a diesel supply business, which she invested her fund and that was the end of the venture.
She enjoined retirees to be wary of the temptation of collecting lump sum when they don’t need it.
Experts on pension should advise and suggest ways of investing lump sum collected by retirees.
It is not enough to observe that some retirees collected their lump sum and misused it.
They should be properly guided on investment for instance, through this platform, which is increasingly generating interest and gaining popularity among retirees and prospective retirees alike.
Please let this my coment be looked into, I agreed with some parts of your example, I could have fallen victim, if not for the government policy that made me to retain 50% for the monthly pension payments .with the high costs of living, my monthly pension of #47666-62 can not sustain me, my monthly pension is below the new minimum wage of #70000.a and there is a circular from PENCOM which stipulate that those below the new minimum wage can collect their balance remaining enblock. I went only for my PFA to inform me that I m not with in the category. My monthly pension can not take care of my needs, I could have suggested that any one whom monthly pension is below the national minimum wage who preferred to with drew his balance enblock should be allowed to do so, they should allowed pensioners like me to enjoy the fruits of my labours. The cost of medication is out of reach I’m a glaucoma patient, drugs are very expensive, old people need good food . My monthly pension can not cater for myself and family. Please advice the government to extend the policy to every personer who monthly withdrawal is below the minimum wage be allowed to withdraw their balance enblock if they so desired, I need my to ventured into agriculture and complete my house in the village, to enable me move to my home town. Thanks
That could be the truth, the reasons for this is not far fetched. Proper education should be given to workers few years to their retirement time. In the military, soldiers due for retirement are most often shortlisted for specialized training so that they can remain strong and useful to manage their retirement pension money.