Why AVCs and Other Options Matter
Why Plan for Retirement?People are living longer thanks to medical advances, but most retire around age 60. That means you could live another 20–30 years without a salary. To avoid financial hardship in retirement, you must start saving early and save enough.
AVCs are extra contributions you make to your pension fund over and above the standard employer-employee contributions. They can significantly boost your retirement savings due to compound growth.
AVCs are extra contributions you make to your pension fund over and above the standard employer-employee contributions. They can significantly boost your retirement savings due to compound growth.
“Contributing just 1% more of your salary could increase your retirement payout by more than three times.”
Benefits of AVCs
- Flexible: increase, decrease, or stop anytime (depending on fund rules)
- Lump sum options available
- Easy to set up—speak to your employer/payroll officer
Tax Note: In Namibia, AVCs are not tax-deductible, so consult a financial advisor to see how they fit into your financial plan.
Preserve Your Retirement Savings
Many people cash out their pension when changing jobs, but this hurts your long-term savings. Instead, consider:
- Leaving your savings in your old fund
- Transferring them to your new employer’s fund
- Using a preservation fund, specifically designed to hold retirement benefits until retirement
Explore Other Retirement Options
Retirement Annuities (RAs)
- Offered by insurance companies
- Funded by regular or lump sum contributions
- Can’t access funds before age 55
- At retirement, you can withdraw up to 1/3 in cash; the rest buys an annuity
Boosting your retirement income is not only about saving more—it's about saving smarter and earlier. AVCs, RAs, and preserving your pension all help close the gap and ensure a comfortable future.