We all want some advanced vision of our lifestyle in retirement. A comprehensive financial plan provides a roadmap to achieving your life goals and long-term financial security. We set out the 10 key areas to be included in your financial plan and how to compose one. Having a detailed financial plan provides you with a roadmap to make practical financial decisions in all aspects of your life. A financial plan gives you the best possible chance of success in achieving your life goals and long-term financial security. Below we highlight 10 important areas to be included in your financial plan. 1 ..read more

When you retire, you have two important choices to make with your retirement savings. These decisions, which require careful thought and planning, could have a material impact on your retirement lifestyle. Decision one: Taking a lumpsum? If so, how much? The amount an investor can withdraw as a lump sum is determined by the pension fund of which they are a member but is limited to one third of the value. The first R550,000 withdrawn in your lifetime is tax free. But any cash lump sum withdrawn reduces the purchase value of a post-retirement annuity which will provide you with your retirement i ..read more

Offshore investing provides South Africans a far broader choice of opportunities with the benefits of more diversification and exposure to different foreign economies and markets. While there are risks associated with investing offshore, the potential rewards outweigh the risks. In this newsletter, we explore the benefits of offshore investing, compare the performance of local and offshore investments, and consider whether there is any benefit in trying to time the volatile Rand exchange rate. Investing money offshore is an excellent way for South Africans to diversify their investment portfol ..read more

Trusts can add enormous value when structured correctly and used in the right circumstances. However, changes to legislation have made trusts less advantageous over recent years. Also, offshore restrictions for SA trusts present a conundrum for families wanting to invest directly offshore to protect against SA specific risks. In this article, we set out what a trust is and its purpose and discuss the methods of transferring assets to a trust.  We identify its advantages and disadvantages and suggest specific scenarios where trusts are a valuable tool to be used. What is a trust? A trust i ..read more

Avoid the negative effect of Sequence Risk Sequence risk is the risk of negative returns at the beginning of retirement having a long-lasting negative impact to your retirement income. For example, if your retirement savings experiences a decline just after you start drawing your retirement income, the income withdrawn will represent a larger percentage portion of your assets than if you had experienced growth over the same period. This means that in future years, you will need to draw a larger percentage portion from your capital to achieve the same level of income. Therefore, if a retirement ..read more

The relationship between risk and reward is a fundamental principle of investing. The higher the risk, the higher the potential reward, but also the higher the potential loss. The biggest risk to your savings is not taking on any risk. To prevent your wealth declining in real terms (after inflation), your investments need to grow above inflation after deducting tax. Over time this can only be achieved by taking on some risk, i.e. by having a portion of your savings invested in risk assets, such as equities (shares), property or bonds. In this article, we’ll explore the importance of understand ..read more

Capital Gains Tax for Individuals An important part of your tax planning is how you manage capital gains tax. Capital gains tax (CGT) is a tax on the profit made from the sale of assets such as investments, property, shares, or businesses. For individuals, 40% of the profit is included as part of your income and taxed at your marginal tax rate. There is an annual R40 000 exclusion, which is deducted from your capital gain. As an example, if you buy an investment for R2mil and you sell it for R3m, you have made a capital gain of R1 million. Of this R1million gain, R40,000 is excluded, and the r ..read more

As the tax year is nearing an end (28 Feb), now is a good time to review your investment tax structures to ensure that you have taken advantage of all tax savings and that you are gaining the maximum benefit from the most tax- efficient financial plan. Gain immediate tax savings before the end of February Use your CGT exemption – Each year, the first R40 000 of net capital gains is excluded from capital gains tax for individuals and special trusts. Top up your Retirement Annuity – If you are contributing towards a Retirement Annuity, maximise your tax-deductible contributions of up to 27.5% of ..read more

Going into 2023, investment markets continue to face many uncertainties, many of which we will evaluate. Despite these uncertainties, most importantly, global markets are not expensive and are offering attractive pockets of value. Global MSCI Index P/E Ratio Although more short-term volatility is anticipated in 2023, the positive is that investors will find attractive entry points during the year, which will benefit them materially into the future. In our 1Q 2023 Market Outlook, we highlight the key events that shaped 2022 markets, the opportunities, and risks for 2023, the outlook for SA, th ..read more

2022 has been a year of surprises. Investment markets don’t like surprises, as we have seen in abnormally volatile markets. At the lowest point, the MSCI (world Index) and JSE declined 25% and 15% respectively and had many weekly swings of 5% up and down. This extreme volatility is an unusual consequence of the many surprises and uncertainties facing markets this year. JSE All Share Index (Rands) MSCI World Index (US Dollars) At the start of 2022, who would have predicted: Russia would enter a protracted war with Ukraine A global energy and food crisis proceeds, with threats of a nuclear wa ..read more