The importance of retirement benefit counselling in Namibia

July 17, 2023

Retirement is an important stage of life and maintaining financial stability currently is crucial. The pension landscape is changing, as it does in many other parts of the world.

Effective retirement benefit counselling is increasingly necessary as personal responsibility for retirement savings gains importance.

  1. Retirement Benefit Crisis in Southern Africa

According to statistics, a sizeable share of the workforce in Southern Africa lacks sufficient retirement savings. Considering recent surveys:

  • Low Retirement Coverage: About 70% of Southern African workers do not have access to employer-sponsored retirement plans, leaving them exclusively dependent on the public pension system or personal savings.
  • Insufficient Savings: Of the workers participating in the employer- sponsored retirement, a significant portion do not contribute enough to retirement savings. There is a significant retirement savings gap as less than 5% of employees, according to studies, actively contribute to retirement plans. 
  1. Importance of Retirement Benefit Counselling

The retirement savings crisis in Southern Africa could be addressed to a certain degree by retirement benefit counselling. Counselling enables people to make knowledgeable financial decisions regarding their retirement by supplying information and customised guidance.

  • Awareness and Education

Retirement benefit counselling raises people's knowledge of how crucial it is to save for retirement and gives them information on the many retirement and investment options. People can use this to make well-informed choices about their financial future. b. Personalised Financial Planning

Every person has particular circumstances, objectives, and risk tolerances. Retirement benefit consulting offers individualised financial planning that considers variables including income, age, lifestyle, and intended retirement lifestyle. This personalised approach aids people in setting attainable retirement objectives and formulating plans to reach them.

  • Maximizing Retirement Benefits

Brokers/Intermediaries/Benefit Counsellors help people make the most of their retirement benefits. By describing the nuances of contribution matching, tax benefits, and investment possibilities, they assist employees in selecting the best retirement plans. Individuals can ensure a more comfortable retirement by maximising advantages.

  • Long-Term Investment Guidance

Advice on long-term investment strategies is provided by retirement benefit counselling, with a focus on the value of diversification, risk management, and routine evaluations. This information enables people to successfully negotiate the complicated financial landscape and choose wisely among investment options to increase their retirement savings.

  1. Social and Economic Impact

Retirement benefit counselling benefits Namibia's economy and society. Counselling decreases reliance on the public pension system, promotes economic growth and stability, and enhances social well-being by assisting people in saving for retirement.

  • Reducing Dependence on the government

The strain on the government pension system can be reduced in a society with a higher proportion of financially independent pensioners. Retirement benefit

 counselling encourages individuals to take charge of their retirement funds, which relieves pressure on government resources and fosters self-reliance.

  • Economic Growth and Stability

Counselling can help you save more for retirement, which boosts the economy's stability and growth. As people amass personal wealth, they can make investments in companies, buy houses, and support the local economy. This economic resurgence supports community development and sustainable growth.

  • Social Welfare and Well-Being

A sufficient retirement fund enables people to support their families in their golden years, maintain their standard of life, and have access to high-quality healthcare. Retirement benefit counselling helps people plan for a secure future while easing their financial burdens and improving their general well- being.

Financial planning is impacted by various life events and retirement is but one of them. For example, your can have a stable secure plan for retirement but what if you become disable? If you do not address this risk with appropriate risk cove, you might need to withdraw from your retirement, which might be the only form of saving that many people have.

Retirement planning is but a component of Financial Planning, which includes Risk, Investment, Tax, Estate and Retirement Planning.

*Paul-Gordon /Guidao-ǂOab is the Corporate Segment Chief Operating Officer at Old Mutual Namibia

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Last modified on Tuesday, 18 July 2023 16:36

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