Don’t have your Nedbank ID yet?
Nedbank ID single sign-on gives you full digital access to Nedbank’s banking and lifestyle products and services on the Money app or Online Banking.
Log in
Log in to Online Banking or another one of our secured services.
Get in touch
Find us
- Login & Register
- Online Banking
- Online Share Trading
- NetBank Business
- NedFleet
- Nedbank Greenbacks
- Nedgroup Investments
- Nedbank ID
- Bank
- Accounts
- Credit cards
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Rewards
- Explore Bank
- Accounts
- Everyday banking
- Youth banking
- Accounts
- Digital wallet
- Private Wealth
- Goal saving
- See all accounts
- Get help choosing
- Family Banking
- Refugees and asylum seekers
- FAQ
- How-to guides
- Everyday banking
- MiGoals Premium
- MiGoals Plus
- MiGoals
- Discontinued accounts
- Youth banking
- Nedbank4Me
- Digital wallet
- MobiMoney
- Private Wealth
- Private Wealth Bundle
- Goal saving
- MyPocket
- American Express
- Amex Gold
- Amex Platinum
- Digital banking
- Switch to Nedbank
- Fraud awareness
- Forex
- Send and receive
- Rewards
- Save & Invest
- Accounts
- Investment services
- Share trading
- Explore Save & Invest
- On demand
- Club
- Money Market
- Stokvel
- In 24 hours
- JustInvest
- PlatinumInvest
- Tax-free Savings
- MoneyTrader
- EasyAccess Fixed Deposit
- PrimeSelect
- In 32 days
- Electronic 32Day Notice
- 32Day Notice
- End of term
- Tax-free Fixed Deposit
- Electronic Fixed Deposit
- Electronic Optimum Plus
- Platinum Fixed Deposit
- Fixed Deposit
- OptimumPlus
- Investment services
- Share trading
- Borrow
- Personal loans
- Home loans
- Student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Explore Borrow
- Personal loans
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Explore loans
- FAQ
- How to guides
- Consolidation loan
- Secondhand car loan
- Home improvement loan
- Exclusive short-term loan offers
- Home loans
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Explore home loans
- FAQ
- How to guides
- Track application
- Building loan
- Switching home loan
- Repossessed properties
- Start your home buying journey
- Solar-energy Finance
- Earn R29,600 p/m or less? See offer
- HomeVision extra funds
- Home-buying Toolkit
- Managing your home loan
- Student loans
- Explore student loans
- Overdrafts
- Vehicle finance
- Solar finance
- Insure
- Life cover
- Funeral cover
- Short term insurance
- Credit Life
- Travel insurance
- Is your business covered?
- Secure Investments
- Explore Insure
- Life cover
- Get a call back
- Explore MyCover life
- Funeral cover
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Get a call back
- Explore MyCover Funeral
- Individual R10,000
- Individual R30,000
- Family Cover
- Build your own cover
- Short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Get a call back
- Explore MyCover short term insurance
- Vehicle insurance
- Building insurance
- House contents insurance
- Valuables insurance
- Credit Life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Get a call back
- Explore credit life
- Home loan credit life
- MFC Vehicle Finance Assurance
- Overdraft Assurance
- Balance Protection Plan
- Personal loan Assurance
- Travel insurance
- Is your business covered?
- Secure Investments
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Get a call back
- Explore MyCover Funeral
- Guaranteed Growth Plan
- Guaranteed Income Plan
- Plan
- Financial planning
- Estate, wills & trust services
- Nedbank Private Wealth
- Speak to a financial adviser
- Explore Plan
- Financial planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Investment planning
- Insurance planning
- Give
- Retirement planning
- Estate, wills & trust services
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Will drafting
- Ensure your estate is managed by an executor | Nedbank
- Trust services
- Financial accounting
- Tax services
- Leave the admin of your estate to us, and not to your loved ones | Nedbank
- Nedbank Private Wealth
- Speak to a financial adviser
- Learn
- Blog
- Explore Learn
- Blog
- Contact us
- Talk to us
- Find us
- Explore Contact us
- Talk to us
- Find us
Changing jobs? Preserve your retirement savings
Dipping into your savings early could leave you millions of rands short for retirement.
It’s so tempting to dip into your retirement savings when you change jobs. But here’s why it’s not a great money choice: you could end up with a whole lot less at retirement if you don’t preserve your savings.
Let’s look at the impact of withdrawing some of your savings when you change jobs rather than reinvesting that money into another long-term retirement fund.
When can you withdraw from your retirement savings?
If you contribute to your company’s pension or provident fund, you’re allowed to withdraw a part or all of your savings from that fund when you move to another company.
The wise thing to do is to shift your savings into a preservation fund that’s designed to preserve your savings until you retire. When you leave your money untouched in this way, you also avoid any penalties or taxes.
If you’re saving towards your retirement through a retirement annuity (RA), you won’t be allowed to withdraw your money without penalties before you’re at least 55. Some RA contracts stipulate a withdrawal age higher than 55, so check yours if you want to avoid paying early-withdrawal penalties.
On the topic of penalties, always bear in mind that you will be taxed on the amount that you withdraw according to specific tax tables.
What’s the impact of early withdrawal on your savings?
Although it seems obvious that you’ll have less retirement savings if you don’t reinvest this money when you change jobs, it’s the long-term impact of this decision that is most damaging.
You might be a millionaire when you retire, but you’re going to need every cent
Picture the following scenario: It is 2022 and you’re 25 years old. You've started your first job and expect to retire in 2062, when you’re 65. You’re earning R15,000 a month, saving R2,550 a month (17% of your salary) and your salary, plus contributions, will be growing by 5% each year.
For the sake of simplicity, we’re assuming that the average inflation over this period is 4% and your annual investment returns are 10%.
Given this scenario, you should end up with around R36 million by the time you retire, to last you, say, 30 years in retirement.
But what if you withdrew some money when you changed jobs, after 10, 20 or 30 years of saving?
Retirement planning
Maya Fischer-French speaks to NedGroup Investment’s Tracy Jensen.
Withdrawing a third of your retirement savings when you’re 35 is the least damaging, because you still have another 30 years for your money to grow and one third of the nearly R1 million you’ve saved by now is only around R300,000. But if you draw one third of your savings 10 years later, you’ll be taking R1.2 million out of the nearly R4 million that you’ve saved. If you change jobs when you’re 55 and take a third of your savings, you’ll pocket R3.8 million.
These look like welcome windfalls only until you see the impact on your savings by the time you reach 65. The following table makes it clear, using the same numbers quoted in our original example:
Impact of withdrawls on retirement savings
Age at withdrawal |
Amount withdrawn |
Estimated amount at 65 |
Estimated shortfall at 65 |
|---|---|---|---|
- |
R36 million |
- |
|
R300,000 |
R31.5 million |
R4.5 million |
|
R1.2 million |
R29 million |
R7 million |
|
R3.8 million |
R27 million |
R9 million |
Don’t be lulled into a false sense of security by these seemingly large numbers. By the time you’re 65, the monthly expenses in our example will be in the region of R75,000, growing to more than R250,000 by the time you’re 95. So, you might be a millionaire when you retire, but you’re going to need every cent to maintain your lifestyle through retirement.
How much is enough to retire comfortably?
Maya Fischer-French talks to NedGroup Investment’s Liezel Momberg and Tracy Jensen.
What we learn from these scenarios is that your decisions today have real long-term consequences. You may feel that you deserve to spoil yourself after 20 years of hard work by dipping into your retirement savings – but rather think twice and speak to an accredited financial advisor for independent expert advice before deciding what to do. Your future self deserves it.
We have a wide range of savings products to help you build a strong investment portfolio through every stage of life. You can also set up savings and investment accounts on the Nedbank Money app.
Want to know more?
Contact your financial planner. If you’re not a client yet, we can help you prepare for retirement. Complete our online contact form for a consultant to call you, or learn more about your retirement planning options.
This information is for general information purposes only and is not legal advice.
