Financial Planning

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Financial Year-End Preparation: A Comprehensive Guide for South Africans

Introduction:

As we approach the year’s end, it becomes increasingly important for individuals and businesses across South Africa to embark on their financial preparations. Sound financial planning and thorough assessments play a pivotal role in securing a stable and prosperous future. In this post, we’ll delve into essential financial checkpoints, emphasise the significance of financial literacy, and provide you with valuable insights to ensure you’re well-prepared for the year’s end. So, let’s embark on this journey together toward financial confidence and success!

The Significance of Financial Literacy:

Before delving into specific financial preparations, it’s essential to highlight the importance of financial literacy. Financial literacy empowers individuals and businesses to make informed decisions about money management, investments, and financial planning. In South Africa, where economic conditions can be challenging, being financially literate is a valuable asset. It allows you to navigate the complex financial landscape with confidence and make choices that align with your financial goals.

Before we dive into year-end financial preparations, let’s shine a spotlight on something truly invaluable: financial literacy. This kind of knowledge equips individuals and businesses alike to make well-informed decisions about managing money, making investments, and crafting financial plans that work. In South Africa, where economic conditions often pose challenges, being financially literate is like having a superpower. It enables you to confidently navigate the intricate financial terrain and make choices that harmonise with your unique financial aspirations. 

Financial Checkpoints for Year-End Preparation:

As the year draws to a close, it’s the perfect time to embark on a journey of financial reflection and planning. We’re here to guide you through the essential checkpoints to consider before the year-end. These checkpoints will help you make the most of your financial resources and set you on a path toward greater financial well-being. So, let’s take a look at these critical financial checkpoints in order to make a real difference to your finances.

Now that we’ve stressed the importance of financial literacy, let’s dive right into these critical financial checkpoints that are essential to consider at this time of the year. These are the stepping stones that will help you harness your financial resources effectively and pave the way for a brighter financial future. 

1. Analyse Where Your Money Went:

Take a moment to look back at your spending over the past year and see if you were able to meet your savings goals. It’s all about understanding the money that came in and went out. By doing this, you can spot the areas where you might have overspent or missed out on potential savings. This kind of deep analysis isn’t about being hard on yourself; it’s about making informed choices to improve your financial habits. So, if you’ve been wondering how to save more or where you can cut back, this exercise can be a great starting point.

2. Review Your Budget vs. Spending:

Assessing your budget to determine where you’ve overspent or underspent in various areas is a fundamental step in gaining insight into your financial habits and making informed adjustments to achieve your financial goals. Ensure your debt and savings levels are manageable and within reasonable ratios. This evaluation ensures that your financial resources are allocated optimally.

3. Pro Forma Tax Forecast:

Perform a pro forma forecast of taxes to make necessary adjustments before year-end.

Consider strategies like charitable contributions or timing expenses to optimise your tax situation. This proactive approach minimises tax burdens while maximising savings.

4. Review Your Credit Report:

Regularly review your credit report for accuracy and identify any potential signs of identity theft. Utilise your free annual credit report from Transunion to stay informed. A clean credit report is vital for accessing credit and financial opportunities.

5. Check Recurring Expenses for Increases:

Examine consistent yearly expenses for cost increases, especially during times of inflation.

Evaluate your budget to create a financial buffer against unexpected events. Identifying areas where you can cut costs ensures financial resilience.

6. Review Charitable Contributions:

Consider maximising charitable contributions to lower your tax bill while benefiting your community. Leverage the tax benefits available for high-income earners through charitable giving. Supporting causes you care about can align with your financial goals.

7. Trim your budget by eliminating unnecessary expenses, freeing up funds for savings or emergencies.

Identify monthly or annual expenses that can be reduced or eliminated. Prudent spending choices lead to improved financial well-being.

8. Check and update beneficiaries on your investments, bank accounts, and assets.

Ensure your financial assets are protected by having powers of attorney in place. Clarity in beneficiary designations safeguards your financial legacy.

9. Update Your Estate Plan:

Evaluate your estate plan in light of significant life changes, such as marriage, parenthood, or relocation. Inventory all assets, including digital assets, and update documents like wills or trusts. A well-structured estate plan secures your financial legacy for generations to come.

Conclusion:

Properly preparing for the end of the financial year in South Africa is crucial for financial stability and success. By following these financial checkpoints and maintaining financial literacy, individuals and businesses can navigate economic challenges and secure a prosperous future. Maysure Financial Services is committed to helping you achieve your financial goals and providing expert guidance in these uncertain times. Get in touch with us today to start your journey.

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The Value of Saving in Difficult Times

South Africa has been through some challenging economic times, with rising unemployment rates, political uncertainty, and the impact of the COVID-19 pandemic taking a toll on the financial well-being of many individuals and families. But even in difficult times, there is value in saving. In fact, it may be more important now than ever before to take out small monthly investment policies.

Building a Financial Safety Net

When times are tough, having a financial safety net can make all the difference. Saving even a small amount each month can help you build up an emergency fund that can help you cover unexpected expenses, like a car repair or a medical bill. This can help you avoid going into debt or having to take out expensive loans, which can compound financial difficulties in the long run.

An emergency fund should ideally be able to cover three to six months’ worth of expenses. (“Safe and Liquid Options for Your Emergency Fund – Investopedia”) However, if you’re not able to save that much, don’t be discouraged. Any amount you can put away is a step in the right direction. The important thing is to start saving now, even if it’s just a small amount and build up your emergency fund over time.

Investing in Your Future

Saving isn’t just about building a safety net for emergencies. It’s also about investing in your future. By putting away even a small amount of money each month, you can start to build wealth over time. This can help you achieve your long-term financial goals, like buying a home, starting a business, or retiring comfortably.

One of the biggest advantages of saving for the long term is the power of compound interest. When you save money, you earn interest on your savings. Over time, that interest can compound, meaning you earn interest on your interest. This can help your savings grow faster than you might expect. By starting to save now, even if it’s just a small amount, you can take advantage of the power of compound interest and see your savings grow over time.

Taking Advantage of Compound Interest

The concept of compound interest can be a little confusing, but it’s actually quite simple. Let’s say you save R500 per month and earn an annual interest rate of 8%. After one year, you’ll have R6,240 in your account. But if you keep saving R500 per month for 10 years, your account balance will be R93,930, assuming an annual interest rate of 8%. That’s a significant difference, and it highlights the power of compound interest.

Making It Easier on Yourself and Your Family

By saving now, you can make it easier on yourself and your family in the future. Whether you’re saving for a child’s education, a down payment on a house, or your own retirement, having a little bit of money set aside each month can make a big difference down the line. It can help you avoid financial stress and allow you to enjoy your life without worrying about money as much.

Retirement is a significant financial goal for many South Africans, and saving for it can be challenging, especially in difficult economic times. However, starting to save early and taking advantage of compound interest can help you build up a retirement nest egg over time. This can help you enjoy your retirement years without having to worry about money as much as you would without any savings.

Investment Options

One of the best ways to start saving is to take out a small monthly investment policy. These policies allow you to save a set amount each month, and they often come with lower fees and better returns than other types of savings’ accounts. Plus, because the amount you save is fixed each month, it can be easier to budget and plan for.

When choosing an investment policy, it’s important to consider your goals and risk tolerance. If you’re saving for a short-term goal, like a down payment on a house, you may want to choose a more conservative investment option that focuses on preserving your capital. If you’re saving for a long-term goal, like retirement, you may be able to take on more risk in order to achieve higher returns.

There are a wide variety of investment options available to South Africans, from traditional savings accounts to unit trusts and exchange-traded funds (ETFs). It’s important to do your research and choose an option that suits your needs and goals. If you’re not sure where to start, consider speaking with a financial advisor who can help guide you in the right direction.

Conclusion

Saving is never easy, especially in difficult economic times. But by starting to save now, even if it’s just a small amount, you can build a financial safety net, invest in your future, and make it easier on yourself and your family down the line. By taking advantage of the power of compound interest and choosing the right investment options, you can achieve your long-term financial goals and enjoy a more secure financial future. So why wait? Start saving today and invest in your future.

Start planning your future, today. Contact us on the details below.

+27 11 839 2302

info@maysure.za.com

Family together and laughing
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TRUSTS: EFFECTIVE ESTATE PLANNING & TAX-SAVING MECHANISMS

In order to effectively organise your financial security and legacy, you need to start by establishing your estate planning questions. These questions often touch on the complex topic of tax and trusts. To bring these concepts together takes a certain skill and expert understanding. This is where estate planning professionals are crucial.

We’ve put together a guide of some of the fundamentals when it comes to the relationship between trusts, estate planning, and tax considerations. Keep reading to find out if trusts are the right vehicle for you and your family. 

WHAT ARE TRUSTS?

Lady holding pen

A trust can be defined as a tripartite legal relationship that exists between a founder, a beneficiary, and a trustee.

The trust is created by the founder, who places his or her assets in the trust, and then administrative control is given to the trustee. This is often done for the benefit of the beneficiary.

Trusts can provide advantages in several areas, such as:

  • Estate planning and management
  • Asset protection and preservation
  • Maximisation of tax-saving
  • Flexibility and confidentiality

Trusts can also operate independently or form part of a broader financial strategy. They are often used as an instrument to allow for the preservation and transfer of assets between generations. They can also be used as a means to manage and protect your assets, after or during your lifetime.

WHAT ARE THE TYPES, USES, & BENEFITS OF TRUSTS?

Two people discussing finances

In South Africa, there are many different types of trusts available. For our purposes, we will be discussing living (inter vivos) trusts and testamentary trusts. Each type has specific uses and benefits.

A living trust, or family trust:

  • Is established by the founder, or family, during their lifetime
  • Becomes effective at the time of its registration
  • Carries with it the benefit of enabling the wealth-building of its beneficiaries during the lifetime of the founder
  • May be used as a means to protect assets

A testamentary trust:

  • Is created by the terms stipulated within the will of its founder
  • Only comes into effect after the death of its founder
  • Offers the benefit of protecting both minors and vulnerable family members
  • It does not safeguard assets during the founder’s lifetime

There are several questions you can ask yourself to assist you with choosing a trust type.

Do you want peace of mind about the management of your children’s inheritance, and what may be left behind when you are gone?

Or, do you want to protect your current assets and build a lasting stream of growth for your family?

Contact us so we can help you find the right trust for you and your family.

TRUSTS FOR ESTATE PLANNING

Woman in discussion with couple

Setting up a trust, as opposed to a will, is an effective estate planning measure. It can result in faster transfer processes, lower administrative costs, and tax reliefs.

Because the growth of the trust does not directly form part of the estate, and instead belongs to the trust itself, the trust is afforded protection against estate duties (unlike with a will). This will also effectively protect the assets from creditors in the event that your estate goes insolvent.

In addition, it can also be used as a means to specify the type of wealth accumulation that you envisioned for your family assets.

For example, instead of providing a lump sum of capital, or splitting up the funds amongst the beneficiaries, the fund can remain unified, continue to grow, and subsequently be used as a source of consistent income.

ENDOWMENTS AS A TAX SOLUTION

Man putting money in a jar

Trusts are not without their drawbacks though. Two of the major pitfalls in establishing a trust in South Africa include:

  1. Heavy tax burdens on income that is kept at the trust-level (between 36-45%)
  2. The inability of the trust, as an entity, to directly invest off-shore

However, there are effective tax-saving mechanisms that can exist within a trust to counter these disadvantages.

For example: if a trust were to invest in an endowment fund, it would reduce its income tax to a flat rate of 30% and their capital gains tax (CGT) to as low as 12%.

An endowment fund also allows for the creation of offshore investment opportunities. This can not only diversify your investment portfolio, but also act as an effective tax-saving mechanism.

IS A TRUST THE RIGHT MOVE FOR YOU?

There are conditions under which it would be beneficial to set up a trust:

  • If your assets exceed 3.5m
  • When you have minor children or vulnerable family members
  • If you want to retain your family’s wealth well into the future

Before you make your decision, it is vital to know that the creation and management of a trust comes with more administrative requirements than that of a standard investment account.

It is a good idea to make yourself aware of these processes and costs before you make your decision. If your top priority is to save on taxes, then a tax-free investment might be a better option for you.

Start planning your future, today. Contact us on the details below.

+27 11 839 2302

info@maysure.za.com

couple going through documents
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Tax Law Changes: Effects On Estate Planning

Within the South African tax sphere, changes are continuously made to ensure fair and balanced taxed households.

Every business owner, employee, and regular individual must be in the know regarding tax laws implemented in South Africa. We at Maysure Financial Services have a firm grasp on estate administration and the relevant tax laws. Keep reading to find out more about changes to tax and the related effects on your estate. 

What are the current changes to tax law?

Man writing in book

Proposal of exit tax on retirement interests (for now)

You may wonder what ‘exit tax’ means’? In simple terms, it is the tax that is payable (when you leave the country) on either foreign fixed property, trusts, shares, or unit trusts as well as similar investments. All of this forms part of the standard process for emigration.

The proposal of introducing an exit tax was drafted last year but has since been on hold. During this “hold”, no tax will be charged on the assets sold. As a result, now is potentially a good time to move for those looking to leave.

Conversations are still ongoing. as the proposal will be re-examined later this year. Here at Maysure Financial Services, we assist you to prepare for the future of your estate and retirement by planning according to what regulations and legislation are in place.

Use of retirement interest to obtain annuities

In the past, an individual could not acquire annuities upon their retirement. However, now, because of the amendment to the Income Tax Act, individuals can choose from different types of annuities. Retirement annuities are an excellent vehicle of income for retirees.

Estate duty

Estate duty should not be an unfamiliar term. Well, that is if you have written a will and made plans for your estate upon your death. 

There are no changes to the tax regarding this particular aspect of estate planning. But, it must be noted once a deceased person’s assets have been filed. This is essential because it is the ultimate duty of the executor to ensure the duty levied on the property of the deceased is paid.

Estate duty is charged on movable or immovable properties/assets of a deceased person. Among other responsibilities, the executor needs to know the value of these assets. 

At Maysure Financial Services, we offer estate administration services to ensure everything is distributed according to your final wishes and loved ones’ needs. 

Capital and income gains tax

Family laying on the ground

When you pass away, your tax expense doesn’t leave earth with you. SARS has the right to claim what is owed to them before any finalisation of an estate. These include income tax, capital gains tax, donations tax, and any other form of tax that may be applicable.

Capital gains tax refers to a tax that is not separate but forms part of income tax. A capital gain occurs when you dispose of an asset for proceeds that exceed its base cost. This tax is normally for companies, individuals, or trusts.

A resident of South Africa, as stated in the Income Tax Act 58 of 1962, is responsible for capital gain tax on assets that are located both in and outside South Africa.

Whistles a  non-resident is responsible for capital gain tax only on immovable property in South Africa or assets of a “permanent establishment”  in South Africa. 

Couple talking to estate administration consultant

How all of these tax laws affect your estate

Drafting an estate plan shows your loved ones that you care for them and understand the importance of planning. Tax laws make up an important part of estate planning which may affect your estate in the unfortunate but inevitable event of your death. 

In many ill-fated cases, families are left in devastating financial and emotional situations because of hefty tax penalties and red tape. A financial professional can help you to navigate the intricate web of tax regulations and stipulations. 

Changes are inevitable. It is how you plan around them that matters.

Man sifting through paperwork

If you need assistance in understanding Acts and Laws concerning your estate, don’t hesitate to call us.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

Tax deductibles
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Optimising Tax Deductibles: Natural Persons Tax

With the taxation season knocking at our door once again, you may have that heavy feeling descending on your shoulders. As much as you may dislike doing it, failing to file your tax returns can get you into serious trouble. The law does not make exceptions for being overwhelmed or stressed.

It’s always worthwhile to get your financial affairs in order. Who knows? Maybe the South African Revenue Services (SARS) owes you.

The point is you can make it through your tax season and capitalise on certain benefits. Here is a guide on how to optimise your tax deductibles.

Overview on natural person’s taxes

Tax time on scrabble blocks with clock in the middle

Taxes that are levied by the national government of South Africa under the Income Tax Act 58 of 1962 are as follows:

  • Natural persons tax (also known as normal tax) income tax

The below taxes form part of a natural person’s tax:

  • PAYE
  • Provisional tax
  • Withholding tax on royalties
  • Donations tax
  • Dividends tax

For this post, we will be focusing on tax returns and deductions. If you would like to know more about the various types of tax laws, read this guide on taxation in South Africa.

Deductibles to remember

Big TAX on chalk board with lady on computer

If you want to optimise your tax deductibles here are the crucial points to keep in mind for your tax return this year.

Contribution to a pension, provident, and retirement annuity fund

Investing in your future will always has a beneficial return. This does not only relate to your retirement, but also to your monthly contributions into pension, provident and retirement annuity funds.

Yes, these contributions are tax deductible. Although these are subject to an annual limit of R350 000 and a maximum of 27.5% of your gross earnings or taxable income (whichever is higher) within a tax year.

Medical aid contributors

Medical aids in South Africa can be costly, which makes receiving back from the medical insurance industry a relief. Here is the good news…

If you belong to a medical aid scheme, as the primary member of the medical aid you qualify for a medical tax credit at the value of R310. Not only do you qualify for it, but your first dependent receives the same tax credit value.

There is also a further credit of R209 for each member that is registered on your medical aid.

Donations for registered Public Benefit Organisations (PBO)

A group of people talking about the tax season

If you donate a sum of 10% of your taxable income to a Public Benefit Organisation (PBO), you can also claim a tax deduction.

However, it is not as simple as just claiming back tax. The PBO must be registered with SARS and grant a valid tax certificate for your contribution.

Travel allowances

If your employer pays you travel allowances, you can receive returns from SARS. Ensure you keep a detailed trip logbook with the related costs. If you do not have this proof, SARS can and will reject your claim.

This is an excellent deductible to keep in mind, especially if your work requires you to spend substantial time away from your loved ones. At least you get some money back in pocket for the time away from them and the added mileage.

Commission-related expenses

two people in business talking about tax

If you are in an industry where you earn commission on top of the basic salary, you may also be entitled to a deductible. This commission-based income is known as 3606 on the IRP5 form.

If the amount makes up for more than 50% of your total income, SARS will see that all costs incurred from making a living from the commission are deducted. Bear in mind that you will need to have evidence of this for SARS.

Business expenses (self-employed)

Self-employed business expenses are deductibles that talk to independent contractors, freelancers, and sole proprietors. If you have stationery, a phone or even employee costs, SARS will allow you to deduct these expenses related to making your income.

You must be thorough when it comes to keeping invoices and records of these expenses. At the end of the day, you want to see some money in your pocket and it will pay off if you follow procedures.

Tax-free investment accounts

Couple talking to a professional about tax

The government introduced tax-free savings accounts to encourage South Africans to save more money. With the tax-free accounts, investors can save R36 000 annually, with the lifetime limit of R500 000.

This gives you the advantage of the compounding interest dividends. You also don’t have to pay capital gains tax.

The dividends received by a person, whether you are a South African citizen or not, are normally exempted if these are South African resident companies.

Final thoughts on optimising tax deductibles

tax planning for this season

Getting the most out of your tax returns can benefit you for a lifetime. Understanding the financial system does not just benefit your pocket, It gives you the financial knowledge you need in order to work with SARS to your benefit.

If you feel you are lacking in knowledge and want to learn more, ask. Your money is a valuable asset that needs to be managed with care and consideration.

If you’re not sure where to turn, contact us at Maysure Financial Services. We will assist you to optimise your tax deductibles and continue on your road to financial freedom.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

family-talking-about-savings
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Family and Budgeting: Financial Anxiety Solutions

Sensitive conversations around money and family can have you running for the hills. These are not easy discussions to have. But, family and budgeting are valuable in terms of understanding the financial stages of life. 

Your relationship with money is like a committed relationship. You need to work at it to be successful. 

Perhaps we have never seen our relationship with money like that. But once we do, the question remains… What is the best way to deal with financial stresses and decrease financial anxiety in our lives?

Have a plan with your money 

family budget meeting

Assess your current financial situation. Sit with your partner and list your family expenses and income. 

Simplicity is key. By understanding what is going on internally, you can evaluate what you are spending externally. 

Install or sign up for a budgeting app to keep a record of expenditure. This will help you to assess and categorise where you need to keep spending or cut back.

Tough conversations with your partner

important conversations around money

Getting on the same page with your partner about finances cannot be overemphasised. Finances can add plenty of strain to a relationship. Often, this is unnecessary pressure.

A good starting point is not to make discussions about money seem like a punishment. Both individuals’ thoughts and ideas around money need to be valued in a financial conversation.

Start by looking at what you both want to achieve financially and of course, what you both care about the most. This can be investments, your home, children, education, or holidays and travel.

Converse with your partner about their views about money. This can help you realise differences in your histories and relationships with money. 

At times, this could be impacting your financial decisions and spending behaviour. You can then form an action plan together, for going forward with finances. 

If you have children, encourage like-minded conversations on how you are spending money on them. Some ideas to help maintain a budget include: 

  • Planning birthday celebrations
  • Accounting for holiday ventures and outings
  • Factoring in creche/school fees
  • Looking at their monthly essentials
  • Keeping an emergency fund for illnesses or other “surprises”

Don’t spend money you don’t have: social media’s role

money and the globe

Social media marketing uses ingenious and inventive algorithms to hit us where we are most vulnerable. These platforms use ads with advanced targeting in order to play on our consumer weaknesses. 

Many of us spend money we do not have. It’s why financial literacy is such an important skill. 

We need to know how much we can afford and learn to say no.

Many people, especially in this day and age, lead a materialistic way of life. There is nothing wrong with having material goals and enjoying the finer things in life. Unless, you are living outside your financial means in doing so…

Teach children financial responsibility 

Spending habits start with the way you understand money and use it. If we do not have the knowledge and saving habits from a young age, it becomes a difficult journey when we are older.

By teaching children financial lessons, you add value to the way they think about money when they grow up. Money conversations should not just be for you and your partner. But essentially, a growing family conversation.

Children need to understand that money is earned. In this way, we shape our children’s futures by giving them a strong financial literacy foundation. 

We can do this by teaching them how to work for the things they want and need. We can tell them and show them by example how to: 

  • Plan
  • Budget
  • Acquire assets
  • Avoid debt, and 
  • Save money

Prepare for emergencies

talking about finances to the family

Life likes to throw us unexpected surprises. For example, a death of a family member, getting sick, being laid off at work, or not having a retirement plan. 

The aftermath of these unexpected emergencies can lead to serious financial strain for a family. The one thing you want to avoid during this already-emotional time is a financial storm. 

A budget should always include an emergency fund for this very reason. This avoids a spiral into debt after any life crisis.

Emergency fund savings

However, do not put all your money into an emergency fund. Be realistic. 
It may take you between six and 12 months to save a comfortable sum of money that you can use for emergencies without feeling the pinch.

Final thoughts on family and budget

money on a map

Starting small is better than not starting at all. Shedding light on bad spending habits will help you to re-evaluate what’s important in your life and better support your money goals.

The emotional and physiological strain finances can have on your health is something to consider too. Money can have a controlling effect on our lives. How you manage it as a family makes all the difference. 

Not everything that comes your way in life will make you happy. Redefining what success means to you – whether it’s a thriving family, regular holidays, a growing business, or a reputable name – will help you to keep on track with your financial and budgeting goals.

– – –
For assistance with budgeting and achieving family financial freedom, please contact our Maysure Financial Services team.

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Marital Contracts and Finances: Beyond the Glitz and Glam

Marriage is all too often related to the wedding day. We all look forward to the glitz, glam, and celebration. It’s the dream.

But, before the adventure and idyllic happily-ever-after begins, the couple needs to take a look at the financial consequences of their partnership. We can help you achieve a firm grasp on the reality of marital contracts and healthy finances. Keep reading.

What types of marriages are there in South Africa?

Rings on marriage agreement

Two individuals can tie the knot through a civil union, customary marriage, or civil marriage in South Africa.

Customary Marriage

A customary marriage is performed under African customary law. The partners must be 18 years or older. Under customary law, polygamous marriages are legal.

Civil Union

Civil unions or partnerships recognise same-sex marriages as legal. The rights granted to couples according to the Civil Unions Act and the Marriages Act are the same.

Civil Marriage

A civil marriage is a union entered into by a woman and man. If no contracts are made, this marriage is automatically in community of property.

If your choice is not to get married in community of property, then an antenuptial agreement has to be signed. This means you will be married out of community of property.

What are the requirements for a valid marriage in South Africa?

House in hand while pointing at signature

The individuals who choose to be in a union must give their consent and should be 18 years of age or older. With a civil marriage, if one or both of the partners are younger than 18, consent from the parents or legal guardians is required. However, no individual younger than 18 can enter into a civil union.

A marriage has to be lawful. For example, closely related people are not allowed to get married and an individual who is already married cannot enter into a second marriage. The exception is under a customary marriage.

Certain formalities under the South African law should be adhered to. The marriage has to be conducted by a marriage officer and two witnesses must be present. For a marriage to be considered a legal contractual agreement, it has to be registered at the Department of Home Affairs.

Understanding marriage contracts in South Africa

Man and woman discussing financial matters

You need to understand the different types of marriage contracts in South Africa. This helps to forestall legal battles and protect your assets if the marriage does not work out in the future.

In South Africa, there are two types of marriage contracts:

  • Marriage in community of property, or
  • Marriage out of community of property
Couple walking through confetti

If you choose to be married in community of property, all your assets will be shared. If you choose not to share your assets, you need to sign an antenuptial agreement. If no antenuptial agreement is signed, you will be married in community of property automatically.

Marriage in community of property

Financial planner advising clients

Marriage in community of property joins together everything you and your partner owned before and during the union. This includes inheritances.

While this may encourage partnership in the relationship, it can also be problematic. You will need written consent from your partner to buy or sell property, including jewellery. Additionally, you will need consent from your partner to enter into credit agreements. 

The debt you and your partner had before marriage forms part of the joint estate. You will hold joint responsibility for your partner’s debt.

These are hard truths. On the opposite side of the coin, there are benefits.

There are times where marriages do not work out. This can lead to divorce.

Divorce can be a messy process at times. But, when you are married in community of property, you and your partner receive half of the assets accumulated before and during the marriage.

This means both partners get an equal share and potentially a better quality of life leaving the marriage than they may have if they had married according to an antenuptial contract. Of course, this point could be argued in a number of ways depending on the individuals and the circumstances.

Marriage out of community of property (antenuptial)

Rings on divorce document

This contract has two options: marriage with or without the accrual system.

A marriage contract with an accrual system protects the individual who is considered financially vulnerable in the union. Marriage without the accrual system automatically allows each partner to manage their assets.

Marriage out of community with accrual

Here is an example of the accrual system in action.

This system may protect you if you are the partner who takes the role of a stay-at-home parent. Or, for instance, if you are actively studying without a source of income.

The accrual system also means you’re not liable for your partner’s debt. You’ll be able to grow and manage your assets without the consent of your partner.

And, the assets you owned before the marriage will remain solely yours. Upon death, your will and testament can leave further instructions about what happens to your assets. You can choose whether to leave these assets to your spouse or not.

Marriage out of community of property without accrual

Couple enjoying a cup of coffee in doorway

Marriage out of community of property with accrual protects each partners’ assets from before and during the marriage. This supports the idea of regulating assets independently.

You do not need the consent of your partner for any agreements. This can work well for business-minded individuals. In the case of a divorce, your partner cannot claim any of the assets you have grown before or during the marriage.

However, this specific system does not protect you if you are the partner with less financial standing in the marriage. Simply because your partner is not required to share any benefits with you under this type of marriage contract.

Final thoughts on marital contracts and finances

Rings in box on marriage contract

Knowledge is power. And that power comes from marrying your heart with a proper understanding of how to protect your finances within a marriage.

For assistance with marital contracts, please feel free to contact our Maysure Financial Services team. We can help you determine the best marital contract for your needs.

Contact us here:

+27 11 839 2302

info@maysure.za.com

Maysure Financial Services is a registered financial services provider. FSP 15173

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Why Wait? Plan Your Retirement Annuity Now

Retirement planning can feel like a boring topic. But, there are a few things we just have to learn about and enact in our lives for peace of mind. 

When we are working, the one thing we don’t think about too often is our retirement days. But, the truth is we need to think about what this will entail for our future and why this is important.

Why should you care if you have a retirement annuity? Let’s share some ideas:

  • If you don’t have a retirement fund, how will you live comfortably in the future? 
  • What about the fact that you might not have a pension fund as part of your employment package?

Retirement Annuities in South Africa 

Elderly-couple-smiling

Retirement planning has never been more essential. The reality is that today can only lead to a better tomorrow when you financially plan for it. By actively saving and investing. Managing your financial portfolio with your broker can only be to your benefit.

Adding another policy to your financial portfolio will not hurt your “future pocket”. But, what does this mean in South Africa?

South African Laws

Laws are complex. Statutes change often and most people can’t keep up with the amendments. However, as much as it can be a challenge, you need to know how your money is affected in this country.

Current Amendment on the Retirement Annuity in South Africa

The latest amendment came into effect 1 June 2021. This legislation governs the retirement fund industry and will focus on helping South Africans to save enough money.

The National Treasury published final notices that give effect to the 2021 Budget announcements to increase the de-minimis amount regarding withdrawals for paid-up annuities. 

gavel and coins

The new law also states that transfers from your various financial portfolios, such as a pension fund, will be portable and tax-free.

The best news about a retirement annuity? There is no limit to the number of retirement annuities you can have in South Africa. An annuity will give you a lifetime’s worth of peace.

Why Should You Invest in a Retirement Annuity When You Are Younger?

As a young adult, you have fewer responsibilities. Therefore tucking away money for your retirement does not feel like a burden. It also helps to create a sense of financial responsibility too. 

  • Start early, there is no such thing as “you’re too young” when it comes to financial planning and stability, especially for the future.
  • Plan, plan, and plan some more. Map out your retirement plan and if you’re not sure how to go about this, speak to a financial advisor. At Maysure Financial Services, we are always willing and happy to assist with your personal finances. 
  • Know your goals. Take control of your finances. Formulate a vision to help you to navigate what the returns on your investments will be. 

Where Do You Start?

If you have little understanding of retirement annuities, speak to a qualified professional. 

Speak to your financial advisor to gain valuable perspectives. Then, you can make an informed financial decision for your future.

person-holding-paper-money

Gaining clarity for your future financial endeavours can only be done by you. You have the authority to start this journey and choose when to start the marathon.

What to Consider When You Are Investing 

Do not rely on your children. Your children have their own lives and dreams to fulfil. 

At times, this cannot be avoided. But, if you have control over your financial circumstances, try and keep it that way. 

Try to avoid depending on Social Security Grants in South Africa. It is simply not enough, especially when you compare it against the cost of your current lifestyle.

The older you become, the more you will need health care. Consider that you will want the best care possible, especially as a senior citizen.

Long-Term Benefits

Although you may be able to access your retirement fund earlier, the idea is to build a long-term income. Trying to save can be a difficult task however the security that a retirement annuity brings until your passing can be a relief.

There are various financial products on the market. The retirement annuity is one of the most attractive of those available. 

With some of the products, you receive a once-off payment of R500 000. This amount is tax-free. However, depending on the amount you withdraw every year the tax is proportionate to that per year.

Live Your Best Retired Life

coins-in-money- jar

Sitting down with experienced financial planners like Maysure Financial Services can significantly enhance your returns.

People don’t plan to fail, they fail to plan. We are asking you to take charge of your finances.
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To find out more about the retirement annuities, contact us here:

+27 11 839 2302
info@maysure.za.com



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Understanding The Financial Stages Of Life

Money is an intricate part of all our lives. Fortunately, financial freedom provides you and your family with the liberty to live securely.

Despite this, most of us know very little when it comes to money. Many of us are not properly educated when it comes to handling finances. The majority of graduates go into the workforce not knowing the importance of setting financial goals.

As your life changes so should your money. Different life stages call for different aspirations and different ways to manage your finances. Here, we aim to equip you with basic knowledge on how to handle your finances according to your life stage.

Entering The Workforce – Get Started Early

Female graduate holding degree scroll

It is important to take steps towards better financial literacy while you are still in your early career years. Create a realistic budget and begin tracking your expenses monthly. If you have any debt make paying it off a priority.

Building a good credit history while you are in your 20s will make your life much easier in the future. A favourable financial standing will make it simpler to purchase big assets such as a car or a house five to 10 years from now.

It might seem premature but the sooner you start planning your retirement the better. This ensures that your standard of living stays the same in your later years.

How To Start Your Financial Journey

Woman leaning against a wall

Achieving a well-formulated estate plan in your early years can seem overwhelming. But, it doesn’t need to be.

It is important to recognise products that can help you gain long-term financial success. Here are a few things you should be doing with your money in the early stages of your career:

  1. Start saving – build your finances when you are still young.
  2. Avoid debt where possible.
  3. Don’t overspend – make a habit of living within your means.
  4. Start planning for retirement.
  5. Get disability insurance.

Partnering with a reliable financial service provider, like our team at Maysure Financial Services, can help you plan for your future. Find someone you trust to help you get started on your money journey.

 Planning Your Family Finances

Young family playing on floor

Settling down and having a family comes with greater financial responsibilities. More people depend on your income at this stage in life (spouse, children, among others). Protecting your income becomes more crucial than ever. 

While saving is always a necessary goal, the majority of your investments should go towards safeguarding your family. One particularly useful tool for this is life insurance. Life insurance can save your family the heartache of financial hardship in the event of an unexpected death.

Purchasing health insurance and disability cover is also a good step in this stage of life. The worst can happen when you least expect it, and you need to be covered for any possible incident. Financially securing your health and wellness will allow you to rest easy in the event of crippling disability or illness.

Another crucial element of your financial plan is your will. At this stage of your life, a will helps make sure that your assets are divided in a way that suits you and your family’s best interests. It also plays a vital role in naming your children’s guardians in case you are unable to raise them.

Business Insurance

You may be planning to take a step in a different direction by starting your own business.

This process can be nerve-wracking and you may be challenged regularly as you bring your idea to life. Be careful not to let a heavy workload keep you from protecting your start-up. 

Business insurance should be the first step you take. This insurance is the first priority and should come before you purchase the business essentials. Your business is an asset and its protection is key in protecting your future financial earnings.

Taking Care Of Your Retirement Years

Mn and woman smiling with a beach ball

In the years approaching retirement, the more you accomplish the better. You don’t want to be in a position where you have to extend your time working after the normal retirement age.

Your pre-retirement years should prioritise the stabilisation of your finances. This is so you can increase your financial security in your later years.

Ideally, this would be the time where you settle financial obligations. These obligations may include elements like paying off your mortgage or your children’s university fees.

Pre-retirement is also a good time to review your portfolio and ensure your investments are producing the desired result. You want to be certain that your money will give you the returns you need in future.

The Early Retirement Years

At the beginning of your retirement, it might be beneficial to plan for all of your potential expenses. Figure out how much you will be spending to help you determine the duration that your money will last.

Consult a financial advisor and look for low-risk investments that could potentially turn your pension into income. With the help of a professional, your savings will last longer.

Late Retirement Years

Couple signing documents around a table

Make sure you are updating your estate plan regularly at this stage. The legacy you leave is sacred. Be sure that the beneficiaries in your policies and will are selected as you intend.

Look for ways to reduce expenses regarding your estate. Products like life cover can reduce any debt or taxes on your estate. This will ensure your loved ones get what they deserve.

Plan Your Future Today

Colleagues at table in discussion

No matter what stage of life you are in, it is never too early or late to secure your finances. A healthy estate plan will grow and adjust with you and your family. 

A crucial aspect of your financial journey is who you choose to partner with you. The right financial service provider will maximise your return on investment, every step of the way. Let Maysure Financial Services help you plan your financial future today.

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To find out more about the financial stages of life contact us here:

+27 11 839 2302

info@maysure.za.com

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Financial New Year’s Resolutions: Shape Your 2021

We’re sure you’re all aware of the classic New Year’s Resolution tradition: you start out full steam ahead with planning your goals for the year and two months later, you’ve lost all motivation. What happens? Naturally, you slip back into your old spending habits and procrastination becomes enemy number one.

It’s easy to fall back into comfortable patterns, especially when it comes to your finances. But, it’s detrimental to achieving your financial goals. Avoiding financial planning often results in far more stress than it would take to set aside some time to plan your finances for the New Year.

Remember, you don’t have to do it alone. We are here to help you by shedding some light on a few key financial resolution tips and how you can stay the course.

1. Evaluate Your Finances

Knowing your financial status is a good place to start when it comes to planning your resolutions. After all, you can’t create resolutions until you know where you’ve been going wrong. Aim to form a realistic baseline idea of your current financial health status, even if it’s not exactly where you want it to be.

This means evaluating your spending habits, calculating your net worth, and reviewing your goals. These actions will tell you more about what your money is doing.

Once you have an idea of what your financial health looks like, it becomes easier to create realistic resolutions and to achieve them.

2. Plan Your Money

Following your evaluation, you can move on to setting financial resolutions that work for your money. This will put you on the road to becoming financially savvy.

But, what exactly does this mean and how do you do it?

Successful resolutions incorporate clear goal-setting and focused timelines. Outline exactly what goals you want to achieve and set an executable timeline. You are less likely to procrastinate and fail at your financial resolutions when they are clear, simple, and doable.

This does not have to be done in a vacuum. It’s advisable to reach out to all your available resources.

A financial adviser can assist you in drawing up a financial plan that establishes clear goals with executable timelines. This goes a long way to creating resolutions that give you more confidence and less stress.

Contact Maysure Financial Services for help to achieve your financial resolutions.

3. Pay Your Debts

You are now well on the path to financial savviness. Armed with knowledge and determination, you can focus on the nitty-gritty of your goals. It’s time to prioritise debt relief and not get sidetracked by debt creation.

In your financial resolutions, outline an effective budgeting strategy that aims  “to ensure that you’re spending with a purpose”. This means paying off your credit card and other outstanding debts before you plan that next big holiday.

Procrastination is the thief of time. The beginning of a new year presents you with the perfect opportunity to get into financial shape and make more down payments to secure future debt relief.

4. Plan Your Investment

Paying off debt is not the only significant aspect to consider, another easily-overlooked area is long-term investment. You may be tempted to set goals exclusively for the now, but “big picture” goals should always be in the foreground of your financial New Year’s resolutions.

Each year that goes by gets you a step closer to retirement. So, make sure you know where you want to be in the future. Resolutions don’t need to be limited to the 12 months ahead. You can make them with the next 12 years in mind.

Investment and finances are a very personal affair. There are so many options to choose from, whether it’s putting money into an investment portfolio or paying off your bond. Make the right decision for you. Discuss your options with your financial adviser to make an informed choice.

5. Review and Relearn

Finally, the best way to stay on top of your goals is to regularly review your budget and always leave space for learning. The more knowledgeable you are about your finances and the financial world in general, the easier it becomes to tackle any unexpected issues that may arise throughout the year.

Another goal you can include in your resolutions is to expand your knowledge by reading more blog posts, newsletters and finance books. If you are armed with the facts, you are prepared for battle.

Another great idea is to have a checklist that you can revisit throughout the year to ensure that you’re staying on track with your goals.

Financial New Year’s resolutions don’t have to become an exercise in procrastination, instead, they can be realistic, simple, and informed.

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Please do not hesitate to get in touch to find out how to make your money work for you:

+27 11 839 2302

info@maysure.za.com

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