Why save for Retirement? …What is in it for me?

The choices we make today, will determine our lifestyle after retirement, so make sure that every decision is a good one. Make sure that every decision counts.

Most people think that their company pension fund will provide them with sufficient income at retirement- this, unfortunately may not be the case and by the time that they discover this, it is usually too late to do something about it.

The calculation of how much retirement savings you need is called a replacement ration, as the income from your savings need to replace your monthly salary when you are no longer working.

There is no one fits all solution, but most experts agree that if you want to retire comfortably, you will need retirement savings that will give you an income per month of about 75% of your final monthly salary.

Research has indicated that the average replacement ratio of South Africans is currently 28%

Some of the main reasons for this is that people do not save enough of their income on a monthly basis and withdraw their retirement savings when they change jobs.

If you would like to calculate your retirement you can access the retirement calculator

Every fortune starts with a rand.

Every success starts with a plan

Why save for Retirement? …What is in it for me?

 

Income tax savings on contributions

Retirement Annuity contributions are tax deductable up to a maximum of 15% on income ( Assuming no pension/provident fund. Ie.all income is non retirement funding)

No Tax on fund build-up

The build-up of the fund is taxed at 0% on interest and rental income and there is no tax on capita gains.

Protection against insolvency

Retirement Annuities are protected against claims from creditors, meaning business risks can be kept separate from personal investments.

Funds remain intact until retirement

Withdrawals can generally only be made from age 55, ensuring that funds cannot be used for any purpose other than providing a retirement income.

Tax savings after retirement

After retirement, you have a lifetime R 300,000 tax free, plus non- deductable contributions can be reduced by any tax free amounts you have not accessed before.

You can contact me direct for a free no obligation consultation

I would also like to offer you a Free E book - The Beginners Guide to Investments
You can download your copy here

You can also Complete a Inquiry form and I wil get back to you.

Magda

mbosman@oldmutualpfa.com

Tel: Direct 021 550 9357/ 021 550 9300
Cell: 0761304130
Fax: 0866361925
Skype: magdabosman1

http://mbosman.findanadvisor.co.za/

Retirement Planning A few Basic rules to remember

Retirement Planning

There are few basic rules you need to remember when making investments and planning for your golden years.

The global economic crisis had an upside in that it encouraged many South Africans to think about how to better manage their finances, start saving for the future and plan for retirement. The financial services industry has many savings and investments options and this has led consumers to feel confused about how to start saving for their retirement. Should one invest directly in the stock market, invest in a retirement annuity or unit trust. The key is to concentrate on the basics and to make sure you are getting some fundamentals right.

START EARLY

The average person has only 500 pay cheques to contribute to their retirement in one lifetime. The earlier a person starts, the better off they will be, as there are limited opportunities towards retirement.

KNOW YOUR RISK APPETITE
Before committing to any investment product, investors need to understand their risk profile. A willingness to possibly lose value in an investment, with the view that it will pay off, in the long run determines an investor’s risk profile. All investments are to subject different types of risk, which can affect the investments return. Most investors will know that although cash is very low risk, the returns earned from keeping cash are minimal as well. Bonds are affected by the risk that interest rates will increase and this decrease the value of the bond. Stocks are higher risk vehicle because they can be affected by events that are specific to a company or its industry. These risks make some investments more suitable for longer investments periods or shorter investment periods.

MAINTAIN REASONABLE RETURN EXPECTATIONS

One should review their portfolio every year. When developing your financial goals, you will typically decide how much you need, when you will need the money, how much you will earn on those savings. Those factors will determine how much you will need to save on an annual basis to reach your goals.

DIVERSIFY

Diversification is a defensive strategy- it protects the investments portfolio during market downturns and helps reduce volatility. It is important to diversify among and within investments categories. An investor’s portfolio should include a combination of some domestic and offshore equities, bonds and cash.

THINK LONG-TERM

Timing the market is a difficult strategy to accomplish successfully, since so many factors affect the market. Most people, including investments professionals, have difficulty timing the market with accuracy. Instead, concentrate on setting an investment programme that works in all market environments and stick with it in good and bad times.

TAXES

Taxes are probably a portfolio’s largest expense. The government has given some great tax benefits to encourage people to save for retirement. Use them! The compounding impact of tax-free returns on income and capital gains over 20 years can make a difference to a more comfortable retirement.

Original article The New Age by Loyiso Sibali

You can contact Magda 0761304130 or mbosman@oldmutualpfa.com

http://mbosman.findanadvisor.co.za/

Are you saving for Retirement?

• Are you saving for Retirement?
• Do you have a retirement Annuity?
• Do you know if it is enough?

Most people choose to ignore that retirement is getting nearer. Only 7% of our country will retire with a sufficient income, but with the rising of inflation it is extimated that around 4% will be independent. Are you one of the 96%?

Take a look at the following pictures

Are you destined to live like this? No really, .......take a look. This is  a man that choose not to invest in his retirement. Sadly this happens all the time. What are you planning to do about it?
Wait for old age to creap up on you.... or start with a plan!

We can offer you the solution

A retirement annuity that offers payment flexibility and access to a wide range of underlying investment options, from as little as R250 per month.

• Invest a regular monthly amount.
• Automatic access to over 200 funds, managed from a range of leading fund managers in SA.
• The flexibility to switch between over 200 investment funds, as often and whenever you like, at no cost.
• Consolidated reporting available on the performance of your investments.
• The more you invest, the lower your plan charges will become as the value of your investment grows.
• Benefit from tax advantages of investing via a retirement annuity tax wrapper.
• Flexibility to add or remove risk protection, as your individual circumstances change.
• The option to make lump sum and scheduled payments when investing in the Flexible Investment Plan.
• Skip up to one year’s worth of premiums over the premium payment term, with the Focussed Investment Plan

Now take a look at this picture... would'nt you feel at pease knowing that you are prepared for retirement.

To start your Retiremement or have a free re evaluation on your current planning that includes your current pension or provident funds.

You can contact Magda Bosman on 0761304130 or mbosman@oldmutualpfa.com