Pension funds-What age should they pay out?
July 31, 2008 4:26am CST
In South Africa the working Society contribute towards theyr own retirement pension Fund. This norammly pays out at the age of 65.I Have aproblem with that and feel that the Fund should pay you say One million at the age of 30. The Fund have some control on how it is being utilized .This would enable one to use your talents as a youngster and maybe start you own Business,Create jobs etc.I do not think getting a lump sum of money at the age of 65 is anything to be happy about. You want the money when you are young. Come on, I think this idea should get me voted for President or What?
31 Jul 08
That's an interesting idea, but if this happened, most likely it would be a mess. First in theory the pension fund is invested so that at the end the money you receive is actualized in relation to inflation, that is worldwide. Imagine if you are now 65 and about to receive your pension, that means that you can take life easy now. 35 years ago a million was unlikely they would have given half probably. Would it have allowed you to live for 35 year plus, we hope a long life, until say 95 that is another 30 years, since you receive the lump sum no further income unless you produce it yourself that means that it has to be very well managed as any mistake or injury would result in financial difficulty. A sensible person would look for ways to invest like you say and create something getting further aid from the small business loans that exist some even have consultants to help at least where I live and make their life better, not so sensible person, goes on a shopping spree uses all the money and then well imagine. It is a cool idea, and since no one knows what tomorrow will bring live for today, if everyone was a financial wizard that would be the way to go.
• South Africa
31 Jul 08
Okay, But is it realy worthwhile getting a lumpsum when u r 65? Imagine the aches and pain in your older body.That is why I say the money is released uppon positive proof of what ur intentions r. It is like getting talents and using it to the benefit of society. With other words at the age of 30 you apply and submit a business plan I use the age of 30 because at that Age (more so Men) you have a sense of responsibillity.Woman become mature much younger if you get my drift.
31 Jul 08
LOL well im no buff when it comes to the ways that pensions work!I do know with a lot of pensions in the United Kingdom that you are able to take a tax free lump sum at the age of fifty from your pension fund,this being private or occupational pensions,and then you carry on paying until you are sixty five,maybe its time for you to get the help of a financial advisor
• United States
31 Jul 08
In in United States we have social security that starts at age 62 or later. The later you start to utilize it the more you will get for a monthly payment. We are also encourage to save for retirement via 401ks at work and IRA. Most companies do not offer traditional pension plans anymore.