Newsletter • Quarter 3 • 2025
WITHDRAWALS today, less money tomorrow
What are the negative effects of making a withdrawal from your retirement fund savings?
Lebo and Selina both contribute R5 000 to their retirement fund every month.
Lebo
Withdrew R100 000 at age 35
Selina
Did not Withdraw from her fund
Because she made a withdrawal, Lebo will have to contribute R660 per month more than Selina for the next 30 years if she wants to catch up by the time she retires.
When you withdraw money, you lose out on the magic of compound interest
Below is an example of how much money you can lose if you withdraw from your savings.
- Taking money out of your retirement savings now may feel helpful for quick cash. But every rand you withdraw today is money lost for your future.
- You lose not only the lump sum, but also the interest your savings can earn.
- You lose the monthly income your savings could have given you at retirement.
Withdrawing from your retirement fund reduces your future savings. Keep your money invested to grow steadily for a better retirement.