With CedisPay Pension-Backed Loans
When you need funds, withdrawing from your Tier 3 pension might seem like an easy option. But did you know there’s a smarter way to access cash while keeping your financial future intact? With CedisPay Pension-Backed Loans, you avoid costly tax penalties and preserve the growth potential of your pension. Here's a detailed look at how you can save GHS 4,410 in just one year.
Scenario Assumptions
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Tier 3 Pension Annual Growth Rate: 21% (based on treasury bills)
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CedisPay Loan Interest Rate: 21.6% per annum (1.8% per month)
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Early Withdrawal Tax Penalty: 15%
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Loan/Withdrawal Amount: GHS 15,000
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Time Period for Analysis: 1 year
Financial Comparison
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If You Withdraw from Tier 3 Pension
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Tax Penalty: GHS 2,250 (15% of GHS 15,000)
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Effective Withdrawal Amount: GHS 12,750 (GHS 15,000 - GHS 2,250)
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Loss of Compounding Interest: GHS 5,400 (difference between GHS 18,150 and GHS 12,750)
Total Cost of Withdrawal: GHS 7,650 (Tax Penalty + Lost Growth)
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Option 2: Take a CedisPay Pension-Backed Loan
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Interest Paid: GHS 3,240 (21.6% of GHS 15,000)
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Future Value of Pension Retained: GHS 18,150 (GHS 15,000 x 1.21)
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Total Loan Cost: GHS 18,240 (Principal + Interest)
Total Cost of Loan: GHS 3,240 (Interest Paid)
Savings Calculation
The savings of taking a loan versus withdrawing from your pension are derived as follows:
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Savings Due to Avoiding Tax Penalty: GHS 2,250
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Loss of Future Value Avoided: GHS 5,400
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Total Cost of Loan (Interest): GHS 3,240
Total Savings = GHS 7,650 - GHS 3,240 = GHS 4,410
Financial Impact Breakdown
| Item |
Amount (GHC) |
Explanation |
| Savings from Avoiding Tax Penalty |
2,250 |
Penalty avoided by not withdrawing |
| Loss of Future Value Avoided |
5,400 |
Growth preserved by not withdrawing |
| Total Benefit of Not Withdrawing |
7,650 |
(2,250 + 5,400) |
| Total Cost of Loan (Interest) |
-3,240 |
GHS 3,240 (21.6% of GHS 15,000) |
| Total Savings |
4,410 |
(7,650 - 3240) |
Why Choose CedisPay Pension-Backed Loans?
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No Tax Penalty: Avoid the 15% penalty on early pension withdrawals
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Preserve Growth Potential: Let your pension continue to grow and compound over time
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Lower Overall Cost: Pay less in interest compared to the long-term costs of withdrawing from your pension
Conclusion
By choosing a CedisPay Pension-Backed Loan, you save GHS 4,410 in one year compared to withdrawing from your Tier 3 pension. This smarter financial option ensures you avoid tax penalties, protect your future pension growth, and secure the funds you need today. Take control of your financial wellbeing with CedisPay. Make the smart choice today! Note: CedisPay is not a financial advisor. This is an illustrative example based on assumptions and does not constitute personalized financial advice.