Conventional wisdom holds that 9 out of 10 (South Africans) will not be able to retire financially independent. I have never actually seen the research that underlies these figures – most of them seem to emanate from the insurance and asset management companies. Depending on which (marketing) material you read the number might differ slightly but they all agree on this – most of us won’t be able to afford the “best years of our...

Have been busy with a death claim on a retirement annuity and have managed to get an extra 50% added to the payout value…read on for the details that once again highlight the value that a financial planner can add to a client’s portfolio. About a month before our client died we sat with him and his wife to work through all his insurances (he had been diagnosed with terminal cancer). We did not do a lot of his old policies but...

…in my opinion at least! I cant understand the motivation behind treasury and the FSB’s latest (very zealous) implementation of the regulation 28 rules that apply to retirement funds. These rules have a whole host of unintended consequences, not least of which, will probably be that RA’s are no longer used as savings vehicles and especially by younger people. First a brief bit of background: The Prudential Investment Guidelines...

The recent changes to Regulation 28 rules around retirement funds has caused a bit of “excitement” in the asset management industry and I have seen at least 2 articles making a case that the stricter enforcement of the Reg 28 rules make Retirement Annuities  unattractive investments, especially for younger investors (see the article by Jan Mouton of PSG Asset Management –...

Not for the first time, I received an email from a client whose domestic worker is close to retirement and who is concerned about having “too much money” and that this will impact on her ability to qualify for an old age pension. She has been told (via the grapevine) that when she applies for a pension the government will investigate her personal circumstances and if she is “rich” she will not qualify for a pension. There are...

Was doing provisional tax calculations for a client and was wondering about the effectiveness of her using an RA to reduce her tax liability. She does not belong to a pension fund and all her income is therefore “non-retirement funding”. As such she could put 15% of this into an RA before the end of February. Here are the figures: Taxable income: R250839 Tax on this (after rebates): R44142 If she put 15% of her taxable income...