Don’t let retrenchment catch you off guard, says Old Mutual Karabo Morule, Strategy and Marketing Executive at Old Mutual, explains:
Although South Africa is sheltered from the worst aspects of the global economic recession, some local companies, like their foreign counterparts, are being forced to lay off workers. Unfortunately, job losses often result in consumers cashing in on their retirement savings to carry them through until they find a job again. This is not an ideal solution as it may result in people being ill-prepared once they reach retirement. “More and more employees are being forced to accept that their careers may be interrupted. Lifelong employment with the same employer is becoming the exception – not the rule. All of us need to review our financial plans accordingly,” says Faan Fourie, Regional General Manager for Personal Financial Advice at Old Mutual. Spending retirement money to meet short-term commitments may worsen your situation over the long term. But are there any steps you can take to protect your financial plans? “Yes,” says Fourie. “An important consideration is to add retrenchment cover to your life disability and severe illness cover.” Should you become retrenched, Old Mutual’s GREENLIGHT Retrenchment Benefit will give you peace of mind, by ensuring that you have a monthly income of up to R30 000 per month while you seek alternative employment. This benefit acts as an income replacement and is also tax deductible if you have a taxable income. “Adding retrenchment cover means that your life disability or severe illness premiums will be paid for at least six months after retrenchment, giving you a valuable financial breather while you get back on your feet,” explains Fourie. He says consumers need to make informed choices when choosing risk cover with the assistance of a financial adviser or broker, adding that it is important to make provision for the unexpected – such as retrenchment. “When times are tougher, it is vital that we reassess our priorities. Importantly, consumers should not lose sight of vital aspects such as taking out risk cover at a minimal monthly premium that provides you and your family with necessary protection. At the same time, this will ensure that you preserve your provision for retirement. Financial advisers or brokers will help to structure an action plan that addresses your needs and creates a healthy financial portfolio that will enable you to face the storm with a stress-free conscience,” explains Fourie. ”At Old Mutual we believe that sound advice is essential to financial wellbeing. Risk cover that provides essential financial protection for yourselves and your dependants will provide you with financial security and peace of mind For more info on getting expert financial advice, contact Karabo Moleke , Manager: Regional Marketing, Personal Financial Advice: Johannesburg Region, Tel: 011 217 1316, Mobile: 082 758 3196, Email: kmoleke@oldmutual.com