Why your retirement dreams are crashing around you

On paper, all retirement planning is perfect. You punch in a couple of numbers into a computer, make some assumptions on contributions, time period and growth on your investments and voila!, the answer comes back in an instant: you are on track or if you are not, the computer programme will tell you how to fix it by making additional investments or working longer.

All retirement planning programmes that I have ever done or seen, assumes an inflation-beating rate of return, depending on how bullish you might have felt about the future performance of your particular investment strategy. Most assume inflation plus 3, 4 or 5% in making these calculations.

Proceed to Source – MoneyWeb

Continue reading

Magda Wierzycka grills the JSE on investor protection

The JSE’s recent annual AGM was a heated affair and for good reason. Magda Wierzycka, CEO of Sygnia Asset Management, clashed with the JSE, saying particularly that listings on the biggest bourse on the continent are becoming questionable. Wierzycka speaks to Arabile Gumede on the Classic Business Breakfast with Moneyweb about the JSE’s responsibility to protect retail investors.

Proceed to Source : Moneyweb

How to pay zero tax in retirement

When an acquaintance recently turned 64, he said he “couldn’t wait” for his next birthday.

The people around the table at his birthday party were taken aback. Most people don’t look forward to getting older. Why was he so excited?

“Because from next year, I will pay less tax!” he quipped.

He was right, of course. At age 65, individuals get an additional tax rebate. A higher annual interest exemption also becomes available.

The comment sparked a question. What type of income would a couple be able to draw in retirement before they would have to start paying tax? Naturally, there are various ways of reducing one’s tax liability, particularly if you use clever structures, avoidance techniques and the like, but what if you kept it simple? In other words, no contributions to retirement annuities or investments in Section 12J venture capital companies – just using the main tax thresholds, rebates and exemptions allowed?

 

Proceed to Source : Moneyweb

Three things to consider before cashing out your retirement benefits

The decision to cash out retirement benefits when changing jobs is arguably the biggest contributor to many pensioners’ dire financial position.

International research suggests that millennials – the generation born between 1981 and 1996 – are most at risk since they tend to change jobs more often than previous generations and will need to overcome the urge to cash out their retirement benefits more frequently.

While there may be instances where it could make sense to cash out retirement benefits, it should be the last resort and it should only be done after carefully considering the long-term implications. Here are some things to ponder.

Proceed to Source : Moneyweb