Question:
I am 57 years old and presently employed by a company that does not have a pension fund or medical aid scheme. I have managed to save some money which I would like to invest into a pension scheme. My idea is to find one where I could buy back time and then continue paying until I retire where after I could get a reasonable pension for the rest of my life.

Is there such an institution?

Answer:
The concept of ‘buying back time’ applied when companies had defined benefit schemes. A defined benefit scheme paid the employee a set figure that related the time he or she was employed by the company.

This is no longer an option because companies are switching to defined contribution schemes. This means what the employee puts in he or she will get out, plus growth. So in other words, it only applies to companies that offer defined benefit schemes and of course you would have to be employed by them to take advantage of it.

If you have a lump sum that has been invested in the bank it does not make sense to put it into a retirement annuity, because the tax has already been paid on it. You should invest in a different vehicle that will give you long term growth and then start a separate retirement plan.

You definitely need to see a financial advisor to help you do this. At the age of 57 it is vital that you choose the right product with the minimum risk and maximum return.