The Running Commentary


Cashing in your future

I was reading the latest trend of people cashing in their pensions when they have been retrenched.

This reminded me about some stories that I have been hearing: People appear to be going as far as resigning simply to access their funds. The reason simply to get out of debt!

The sad truth about this is that folk are feeling the pressure and are reacting to it. Worse still though is that they have not been on any course to change their current spending behaviour.

We are hearing that 2015 will see the introduction of a social welfare type grant, but this is certainly not confirmed.

What we will know is that this grant is not going to be “enough”, simply because people have not answered for themselves “what is enough”.

This then is the root cause of the issue. People will always live to their means, this translates into people doing foolish things. Instead of cutting things out of their lives they dig into their future.

Without changing your spending pattern you will never truly get yourself out of debt. This will “force” you to make decisions like tapping your pension.

Rather make the correct purchasing decisions now. If you can really afford it then buy it, if not then don’t


Mike • October 4, 2009

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  1. Adrian Larkin October 20, 2009 - 4:45 pm

    mmm the question to all of this is where you stand and in what sort of financial position you are in to start with.

    So I think the real thing is where on the food chain are you and how are you operating in that space. Take my mother in law. Worked for the same company for 35 years and paid into a pension fund all those years. She was informed that her pension would be more than enough to live on.

    She gets out R2880 per month her Medical deductions for cronic medication and medical aid are R1000 per month her levies for her flat are R600 per month leaving her about R1200 for food, electricity, water and petrol.

    So I think that in most cases the pension will never be enough, but no pension is worse. Using you pension is a foolish short term solution unless you make it work for you.

    In these times you have to make sure that the efforts you put in now will have long term reward. So if a cleaner puts in 10 years into a company what will they have at the end of the day? when times are hard will the be retrenched or will they be looked after?

    Effort – how much effort do they put into their jobs, how effective is their effort. There will always be a place for people who deliver results, but will that be enough for them to live on.

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