Those facing retrenchment or retirement can look forward to better tax breaks from this year, with retrenchment or retirement tax-free payments increasing from R30,000 in a lifetime to R315,000, effective from the 2012 tax year. This is according...
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How to calculate if you are on track for retirement
The Crawford Measure has been created by Dave Crawford, a financial educator. It is a simple spreadsheet that helps to calculate whether or not your retirement savings are adequate. It starts with your current living standard and then compares that...
Am I saving enough?
“I am a 31 year old dedicated saver and I have two main savings besides my pension and I want to know if they are the right investments. I've been increasing these savings by 10% each year and putting some into my bond. Do you think this will give...
Debt free in retirement
"I am looking at possible retirement in 3 to 4 year’s time. The current value of my pension fund is R4.5 million but I have a home loan of R800 000. Should I use part of my fund to settle the bond?" asks David Maya replies: You don’t want to cash...
Smart investments for pensioners
Investors have endured continuously falling short-term interest rates, which are now reaching 30-year-lows. This begs the question as to what pensioners should do with their investments in the fixed interest domain, given the current environment....
Five mistakes to avoid when saving for retirement
The average retiree will have generated savings that will purchase a pension of only 30% of the salary they were earning before retirement. It's a gloomy statistic, suggesting that we're either not well informed, are not getting the right advice or...
Ten reasons to invest in an RA
If you're thinking of investing in a retirement annuity (RA), consider the advantages according to Rowan Burger, head of investment strategy at Liberty Retail South Africa. "To prevent people from relying on the government to provide for them in...
Paying for financial advice
Dumisani asks: In 2009 I took out a retirement annuity with Momentum to supplement my company provident fund. I contribute R500 per month to it. I recently requested that my portfolio of underlying unit trusts to be restructured into a higher risk...
Financial media vs the financial adviser
Can the financial media replace the financial advisor A recent survey by financial services company acsis looked into the financial security of middle income South Africans. They were specifically interested in how secure people felt around their...
Divorce and pension fund benefits
If you're divorced, or in the process of getting divorced, the issue of pension fund benefits is one you may want to think about. Remember that pension interest forms part of your spouse's assets, so you may be entitled to a claim, depending on...
Previous Articles
How the wealthy view work and retirement
A new global report says the wealthy want to carry on working, not retire. According to the latest Wealth Insights report, The Age Illusion: How the wealthy are redefining their retirement, released by Absa Wealth (an affiliate of Barclays Wealth), 60% of global...
The pros and cons of coastal retirement
Coastal retirement seems like everyone's idea of paradise: beach walks, dips in the ocean and, of course, the view. But is your plan to buy a property that will appreciate in value so you can sell it later on? Or are you thinking of staying put for good? "Retirees...
Why is life-stage investing a good idea?
Simply put, investing when you're 20 and investing when you're 45 are two completely different ball games. It's good to know that, increasingly, retirement funds are taking this into account and offering members a "life-stage" investment option, which takes into...
Who gets your retirement fund benefits when you die?
If you've nominated someone other than a dependant as the beneficiary of your retirement fund, your wishes might not be honoured when you die, even if you've made that person the sole beneficiary of your estate. This is because pension fund legislation favours...
Investing for inflation: part two
The first choice for most retirees is to purchase an inflation-linked annuity that will pay a set income for life that increases with inflation. This provides predictability and you know that you have enough income to meet your needs for the rest of your life. The...
Investing for inflation: part one
It's no secret that inflation is set to rise. This is bad news for everyone, but especially for pensioners, who need their retirement savings to generate an adequate real return while preserving capital, or at least minimising the risk of loss. Over time, it's been...
Why socially responsible investing affects you
The environment wasn't the only thing to suffer with BP's oil disaster. Investors – including more than 1 000 institutions that owned portfolio stock in BP to the combined asset value of $2,7-trillion – took a serious hit. BP lost more than half its market value,...
Jargon buster: beneficiary funds
A beneficiary fund is a specialised type of pension fund that was introduced in 2009 by the government. It exists exclusively to receive lump-sum payments, known as death benefits, on behalf of minor dependants. It was introduced specifically to replace umbrella...
What should be in my financial plan?
Pay off debt: It is always best to pay off high interest debt like your credit card. If you want to use your credit card for convenience set up a debit order so that it is paid in full at the end of every month. Emergency fund: Everyone should have an emergency fund....