Often when receiving a retirement fund benefit statement, one would immediately examine the rate of return earned on the investment. Few pay much attention to costs and fees charged to their retirement savings. But these fees, even though they may appear small, can impact on a person’s ability to retire as high fees can mean steady erosion of wealth over decades.

Just as compounding interest delivers growing returns to long-term investors, high fees do exactly the opposite; a static cost rises exponentially over time.
In simple terms, fees limit savings directly by reducing the amount saved, and indirectly by lowering the amount available for compounding.

Scenario 1
Suppose you have an investment account worth R80,000. You hold the investment for 25 years, earning 7% per year and paying 0.50% in annual fees. At the end of the 25-year term, the value would be approximately R380,000.

Scenario 2
Now, consider the same scenario, but with one difference; you aren’t paying attention to costs and you pay 2% in fees annually. After 25 years you are left with approximately R260,000. That “small” 2.0% totalled R120,000 in fees.

Master Builders KwaZulu-Natal are the Administrators of the KwaZulu-Natal Retirement and Provident Funds. The benefits contained in the funds that we administer have been recently enhanced at NO ADDITIONAL COST to the member.

Contact us today to do a comparison of what we can offer you for the same value that you are contributing to your current fund.

Remember, you and your staff could have a more secure retirement with boosted fund benefits and enhanced savings.

Contact us on 031 831 3217 or email us at benefits@masterbuilders.co.za

Vishane Pramrajh | Employee Benefits Manager