In tough economic times like these, cashing out your pension fund when you change jobs may seem like a quick cash-flow fix but, in actual fact, it's self-sabotage.

Cashing in your pension borrows from your future and sabotages your financial wellness in retirement, Jeanette Marais, the CEO of Momentum Investments, says.

Marais says when you withdraw from your retirement savings prematurely, you not only reduce the tax-free lump sum you will get when you retire, but you also increase the rate at which your retirement savings will be taxed.

When you withdraw from your pension fund on resignation from your job, the South African Revenue Service only allows you to take R25 000 tax free.

Any amount above that is taxed at 18%. If your withdrawal exceeds R660 000, you will pay tax of 27% on anything that exceeds R660 000 and 36% on anything withdrawn above R990 000.

Marais says if, for example, you decide to change jobs and cash out your pension fund savings of R500 000, you would get the first R25 000 tax-free and then pay 18% on the R475 000.

This means you would pay R85 500 in tax, leaving you with R414 500.

Assume you later resign from a job again and withdraw an additional R550 000. You will then pay R139500 in tax, bringing the total paid to SARS to R225 000.

Had you chosen to only cash in at retirement age, your first R500 000 would be tax free.

But if you withdraw before retirement, the withdrawals count against you at retirement and you lose the exemption. You will end up paying R94 500 more in tax as result.

The more you cash out your pension fund, the more tax you will have to pay for each withdrawal, leaving you with less and less money when you retire, Marais says.

If you are tempted to cash out because of debt, think about the reason you are in debt - usually it is an unhealthy relationship with money and a lifestyle you can't support, she says.

A budget will prevent you from living beyond your means and keep you from stealing from your future when you are too old to earn an income.