Seithati Motšoeneng
METROPOLITAN Lesotho has cautioned Basotho approaching retirement against making costly financial mistakes that could jeopardise their livelihoods, warning that a pension payout meant to sustain them for decades could quickly be depleted through poor financial decisions.
The insurance giant has urged workers to plan ahead, manage their pension payouts wisely and protect their financial security in retirement.
The warning was delivered during a Pre-Retirement Seminar hosted by Metropolitan at the Convention Centre this week, where employees nearing retirement were equipped with practical financial guidance to help them navigate life after formal employment.
“That substantial retirement payout is not a lottery win; it is designed to sustain you for the next decades,” Rethabile Mapena of Metropolitan’s Retirement Funds Administration Programme told participants.
Mr Mapena said many Basotho entered retirement financially vulnerable because they failed to appreciate the long-term responsibility that came with accessing their pension benefits.
“Treat your lump sum as income for the rest of your life, not as wealth. The moment you treat it as wealth, you will spend it as wealth,” he cautioned.
He identified five major retirement pitfalls: treating a pension lump sum as accumulated wealth, retiring with excessive debt, failing to manage family expectations, underestimating inflation and longevity, and investing without professional financial advice.
Mr Mapena warned that carrying substantial debt into retirement could significantly compromise pensioners’ financial independence, noting that many workers retired while still servicing personal loans, vehicle financing and home loans.
He also highlighted the pressure retirees often faced from family members and extended relatives, saying the expectation to provide financial support could gradually erode retirement savings.
“ You must learn to manage family expectations. Supporting children and the extended family can easily become an unsustainable burden on retirement savings,” he said.
Mapena further cautioned against inadequate retirement planning, particularly among individuals who budgeted for only a few years after leaving employment.
“ You must plan for 20 to 30 years. Inflation will erode your money, and longevity will test it. Many people underestimate both,” he said.
Metropolitan Lesotho Managing Director, Rethabile Motsoahae, said the company had introduced the pre-retirement seminars out of concern for the financial wellbeing of its members, particularly following legislative changes allowing pensioners to access up to 50 percent of their pension benefits as a lump sum.
As one of the country’s largest pension administrators, Metropolitan recognised the importance of ensuring that members understood the implications of accessing substantial amounts of money at retirement.
“Metropolitan took action due to our concerns as the largest pension administrator, knowing that pensioners can now withdraw up to fifty percent of their pension. While this is a positive step, it can inadvertently invite significant trouble for many,” Mr Motsoahae said.
He explained that large pension payouts could attract unnecessary attention, potentially exposing retirees to financial exploitation and scams.
“We are committed to safeguarding your future and that of your families, hence the seminar today,” he added.
Another key speaker, Tlali Mpholo, warned that the sudden availability of substantial pension benefits often tempted retirees into adopting lifestyles they could not sustain.
“Many pensioners are distracted by the substantial lump sums they receive from their pension funds, leading them to inflate their lifestyles,” Mr Mpholo said.
He said pensioners were particularly vulnerable to financial scams when they became overconfident about their financial position following a payout.
“Many pensioners fall into the trap of feeling overly secure after a pension payout, making them highly vulnerable to scams,” he warned.
Mpholo also stressed the importance of stable personal relationships and careful financial management in protecting retirement benefits.
Financial educator Robert Likhang urged workers to begin preparing for retirement well before their final day of employment, emphasising the importance of adjusting their financial habits and expectations early.
“Adjust your mindset and budget accordingly. Living within your means is crucial for achieving peace of mind ahead of retirement,” Mr Likhang said.
He advised employees to gradually scale down their lifestyles while still earning a salary, rather than waiting until retirement to confront the realities of living on a reduced income.
“It is vital to scale down while still working to secure a better life afterward, rather than struggling to adapt to a tight budget only after retirement arrives,” he said.
Mr Likhang challenged the perception that retirement inevitably leads to financial hardship, saying many people continued to build wealth well into their later years.
“Many individuals actually build wealth in their 60s and 70s, leveraging the networks they have built and facing fewer life pressures,” he said.
He encouraged workers to view retirement as an opportunity to pursue new ventures and make productive use of the experience and professional networks accumulated over their working lives.
The seminar forms part of Metropolitan’s ongoing financial literacy initiatives aimed at empowering workers with the knowledge and skills necessary to make informed financial decisions and transition confidently into retirement.
Through the programme, Metropolitan seeks to reinforce the importance of prudent financial planning, responsible management of pension benefits and long-term financial security for retirees and their families.
