Broker Directory Article
Retirement Planning in South Africa
Saving for your retirement is not something that should be left for the last minute. In fact, Retirement Planning is not something that should be overlooked at all, or even indefinitely discarded.
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• Weighing in on tax-free savings accounts and retirement annuities (May 24, 2017)
• Retirement Fund Landmines at Divorce (Sept 05, 2017)
• Are you prepared for Retirement? (June 01, 2017)
• Tax benefits and Tax Free Savings: Retirees’ Income (May 04, 2017)
• Tax efficient retirement savings (March 31, 2017)
Don’t procrastinate - Saving and planning for your retirement, doesn’t need to be scary or complicated.The biggest barriers to Retirement Planning, beside the inevitable, unpredictable and uncontrollable changes in the investment environment, are people’s stubborn belief that they know better – including having a prevalent culture of immediate gratification and a tendency to procrastinate.
Unfortunately, many people do not view saving for retirement a priority. If you are still working today, you can use the power of compounding, smart planning and advice to get to where you need to be. One of the best and most convenient ways to save for your retirement, is with Retirement Annuitities (RAs), which is a flexible and cost-effective retirement saving option. Retirement Annuitity (RAs) typically allow an investor to contribute on an ad hoc basis – often subject to minimum investment mounts and other criteria – or on a regular basis, e.g. via monthly debit order. Such contributions are tax deductible up to a limit, and the investment is sheltered from capital gains tax and dividends tax, thus significantly improving potential returns for the investor.
An Retirement Annuity (RA) is of particular importance, especially if your company does not offer a Provident or Pension Fund – and it remains an excellent way to grow your money to ensure a successful retirement. There are a number of long-term savings and investment vehicles available for retirement saving purposes, although RAs, company pension funds and provident funds are the most popular ones specially designed for this purpose.
But how can you ensure that you will have enough money come retirement? The standard answer to this question is that between 10% to 15% of your income should be saved for retirement while you are in your twenties. This, unfortunately, is not the case when you are that age – other things, products, services, luxuries – seem more important at the time. Therefore, by getting proper financial advice early in life, you should be able to calculate what income you will need at retirement – based on your retirement needs, financial situation and responsibilities. Factors such as price inflation, general increase in prices, the cost of living and a corresponding fall in the purchasing power of your money, should all be taken into consideration.
Planning for your retirement today, is not as scary or as complicated as misconceptions have made it appear. It is a relatively straight-forward process – and with Financial Advisors readily available, as well as a host of retirement vehicles, there should be no excuses to neglect the financial health of your future. A small sacrifice today, may mean the difference between having long-term financial stability on the one side, or having to rely on your family for your living expenses on the other.
Also, note the following guidelines, tips and considerations applicable to Retirement Planning:
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