Members of the Fund can retire early from the age of 55 years, with approval from their employer. There are however a couple of negative factors that you need to consider before thinking of early retirement:
Loss of future earnings: The earlier you retire the more certain you need to be that your savings will last until you die. You must accept that you are forfeiting the opportunity to increase retirement savings.
Reduction of income: You lose fringe benefits and often also employer contributions to your medical scheme. Your pension will invariably be lower than your salary at retirement.
The best financial years of your life: The last 10 years before retirement is normally a period when you have no dependent children, allowing you to increase your savings. You are also able to achieve the biggest growth on your investments due to the large capital that you have built up in your fund. This is when the full force of compound interest is at work.
Your level of debt: You should have paid off your debts by the time that you retire. You should postpone your retirement if you have a high level of debt. You will reduce your pension significantly if you use the lump sum benefit that you receive at retirement to pay off your debts.
Emotional preparation: Many people are simply not prepared for retirement and find it very difficult to adapt to a quieter life – some experience depression and a loss of belonging.