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Chuks Udo Okonta
Do you know that your aspirations for a comfortable retirement life can be hampered by certain actions you take? These actions may seem good to you as they may help you meet some needs, but at the long run they negatively impact your life in retirement.
The actions are:
*Inadequate contributions and remittances
Your failure to ensure that adequate pension fund is contributed and remitted by your employer can affect what you have in your retirement savings account. Therefore, ensure you closely monitor the compliance status of your employer towards contributing and remitting your funds.
*Non performance monitoring
As you monitor what is been contributed and remitted into your RSA, also monitor the performance of your Pension Fund Administrator (PFA), to ensure your fund is yielding the necessary return.
*Demand for lost of job benefit
The 25 per cent lost of job benefit, though good for the time you needed it, but draws down your savings. It is necessary to have multiple sources of income to sustain the fund in your RSA.
*Pension mortgage finance
Leveraging pension contributions for mortgage finance may seem good, but the wider implication is that it reduces your savings.
*Lump sum payment
Many retirees seek lump sum even when they don’t need it. Some just for the joy of having part of their pension fund in their account go for lump sum. If you don’t have a pressing need for pension lump sum, avoid it and channel the full retirement savings account into monthly pension benefits – annuity or programmed withdrawal.
*High risk fund
The pension fund structures which are categories from defunct to high risk can also impact negatively on your RSA. Your action to seek high return under high risk fund can be injurious to your RSA.
*Portability
The RSA transfer system, also known as transfer window can affect your RSA. Investigations have revealed that most RSA holders transfer their funds just because of bandwagon effects. Such an action can lead to bad investments decisions.
*Non data update
Your decision not to recapture or update your data with your PFA may lead to investment lost as there are huge unaccounted funds with PFAs. As pension sector calls for data update you should heed the call.
Now that you’re aware of how these actions can ruin your retirement savings contributions, do all you can to avoid taking these actions to ensure your contributions serve you well in retirement. Cheers.
