Changing jobs? Remember your pension money!
Cape Town, 19 April 2012
The days of working for one employer for thirty years to claim that golden watch are gone for good. Today, the general trend in South Africa - in most industries - is to change jobs every five years in order to remain relevant, credible and suitably experienced. However the one thing employees tend to neglect when job hopping, is the financial implications.
Bev van Nijkerk, a segment specialist for the Young Professional Market at Sanlam, says keeping your financial planning in check is crucial as you advance in your career, and a lack of planning in this area could be detrimental in the long term.
“When you leave your current employment, money which you or your company contributed to your pension fund, becomes available to you. You then have the choice of what you’ll do with this money in order to continue to grow your financial portfolio and savings you’ve built up to this point,” she says. There are a number of factors to consider in order to make the most educated decisions regarding your future:Take stock of your current portfolio
Bev recommends educating yourself first on your current financial portfolio before you consider pursuing greener pastures.
“First of all, consult your financial advisor and your human resources manager to determine your current cover and savings, and what the exact value of your pension fund, group life benefits (such as income protection and life cover) and/ or retirement annuities. For example, do you know whether you’re covered for income or disability protection if you suddenly become unfit to work, how much will be paid out, and over what period?”Prepare for the job interview
If you’re ready to shoot for that exciting position at a hot new firm, make sure you do your research during the interview process and determine exactly the type of benefits the new company has to offer. For example: does the new company offer you any group life benefits like income protection or pension scheme contributions, and how much? You need to weigh these up against your current portfolio and decide whether it is worth your (financial) while to move. Your salary alone (cost to company) might not always make for a justified decision to change jobs!Changing jobs
Once you’ve resigned, ensure that you tie up all financial loose ends at least six weeks before your last day at your current employer. You have the following choices in terms of pension contributions and Bev advises to sit with a financial advisor to help you plan the best route for your specific needs:
“The best course of action is to discuss the various options with your financial planner to determine the most suitable option for you, considering where you are in your career, and what dreams you have for a financially secure future,” Bev concludes.
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