Question:
I am 64 and my retirement date is 08/2015 but I am retrenched on 31/10/2014. My total pension fund is R1 000 000 and have a retrenchment benefit of R400 000 from my employer. I am not sick or nothing. What is the best option for me, seeing that I am near retirement age and want to go on pension after my retrenchment.
Answer:
Jaco, Apologies for the late response. That is a difficult question, that we cannot answer without conducting a full financial needs analysis. On retirement, you are required to use two-thirds of your pension fund to buy an annuity, either a guaranteed or a living annuity; if you resign from the pension fund before normal retirement age, you can take the whole amount as cash but you will then pay a higher tax rate on the cash taken. Please refer to our online tools, to help you with your financial planning.
