PSG Financial Services is warning South Africans not to withdraw money from their retirement savings too early.
This warning comes as National Treasury plans to discuss a new system called the two-pot retirement system. This system may allow people to withdraw some of their retirement savings if they are struggling financially.
Even though this may help people in the short term, PSG says it can cause bigger problems in the future.A financial expert from PSG, Ronald King, said that taking money now means you will have much less when you retire.
For example, if you withdraw a small amount today, you could lose much more in the future because your money will not have time to grow. He also explained that some of the money withdrawn will go toward tax, so people will not receive the full amount.
Many people also use the money to pay off debts, but then end up getting into debt again later.PSG advises people to think carefully before using their retirement savings.
It may help now, but it can make life harder when they are older and no longer working.
Sub-Editor :Mathole Rachel
