Never Cash in your Pension Savings
Saving or spending impacts ON your retirement and the quality of your life when you stop working.
When you resign you can either:
The graph below shows the impact of cashing out your retirement savings and indicates the increased percentage of your salary you should save each time to make up for the loss of your retirement savings.
Unfortunately 93% of people resigning from Woolies cash in their pension, and only a tiny percentage use this to settle their bond. The majority needs the money to get out of serious debt.
July was Savings Month and this is another nudge for you to start taking control of your money so that you do not end up with a lower standard of living when you stop working and retire.
If you change jobs, you have the choice of preserving or cashing in your retirement savings. Unfortunately, members are often unaware of the disastrous consequences of cashing in their pension savings for short-term gains such as paying off debt.
You currently contribute 7.5% of your monthly salary towards your retirement savings. This money is invested for you and over the long term it will grow into a significant amount. Woolworths contributes 8.23% each month (for TCOE members this is paid from your total salary).
If you cash in your pension, in the future you will need to save more every month to make up for the savings you have lost.
CONCLUSION: It is always better to preserve your retirement savings. Never cash in your retirement savings.