When you move from one job to the next or if you are retrenched or decide to resign there are some important things to attend to before leaving your company which will guard your financial security.
Preserve your retirement fund
You have options to transfer your retirement fund benefits to a retirement annuity, your next company’s retirement fund or your own preservation fund. By doing so you will avoid paying the tax if you cash in your fund.
A preferred option is the preservation fund as you can access the fund once, in part or fully, before retirement age 55 at which time you pay the tax. The great advantage is you get to compound on the full value (the tax saved) which grows the fund that much more. The preservation fund becomes a superb safety net for your future if things don’t work out in your next job and you need time to find another one.
Review your insurance Check with the scheme administrators if you have a continuation option on your benefits. This will allow you to take out a new policy with these benefits without having to qualify for medicals. If you have health issues you are probably not insurable. This option keeps you insured as you retain the same benefits automatically. This option should be made in conjunction with your new employer’s benefits and your personal assurance portfolio.
Ensure continuity with your medical aid Be very careful to ensure that your medical aid plan continues when you leave. Arrange with your employer to advise your scheme that you are leaving and ensure that you set up payment details from the day you leave your company.
Medical aid covers you like any other insurance provided your premiums are paid. Your continuity on the fund will also avert any potential penalties for joining a new fund in the future.
Changing your job is a life-changing event which has financial implications. Make sure that you attend to these important areas to ensure that you continue your financial protection from the day you leave your company and don’t risk even a day in between.