Old Mutual Group says they have observed a disturbing trend by employees when changing companies – the cashing out of retirement savings.
Managing Executive: Old Mutual Corporate Consultants, Blessing Utete, says this behaviour has unfortunately led to people not retiring comfortably. Utete disclosed this yesterday during Old Mutual Eswatini’s Lihawu Thought Leadership Forum, Program 2025, themed ‘Rethink Retirement.’
He said this phenomenon has gained momentum as people switch more jobs these days.
“Research indicates that nowadays people switch employers 8-10 times in their career. This leads to most employees not having enough when they retire.”
Utete urged people not to touch their pensions when changing jobs, but instead preserve it. He said what makes the situation worse is that most people spend the money on vacations and cars while neglecting their future.
He noted that other people use their early retirement payout to pay off debt. “People are over-indebted, so they use every opportunity to reduce their debt. Retirement payouts are also used to pay for school fees.
He added that there is also a minority of people who cash out their retirement benefits to start businesses, a risky decision considering this is the last income they will ever have.
Old Mutual Eswatini’s, Business Development Manager, Banomile Hlatshwayo echoed Utete’s sentiments noting that it is critical for people to stay the course and not rush to cash out their retirement savings.
“Stay the course, wait until you reach your retirement age, which is 60, or 65. Switching employers is not an opportunity for you to cash out your retirement. When switching jobs, move your retirement savings to a preservation fund,” she advised.