Retirement planning Archives - Maysure Financial Services

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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

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.

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.

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

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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Retirement Annuities: Everything You Need to Know

Nothing is guaranteed except death and taxes. Never was this statement more true than in the year 2020. Unpredictability was the theme with financial stability taking the hardest hit. Almost everyone was forced to learn the importance of saving for a rainy day and the value of solid financial planning.

Of course, no decent plan is complete without the big R. Retirement planning is an essential investment that could make or break your financial future. But, when is enough, enough? How much should you be tucking away for future expenses? How can you be sure that your money will last?

One solution is to add a retirement annuity to your investment portfolio. This investment vehicle is designed for individual investors and is separate to a pension fund provided by your employer. In this guide, we cover everything you need to know about retirement annuities and help you decide if it is a good fit.

What Is a Retirement Annuity?

Retirement Annuity on label of clear jar

A retirement annuity is a long-term investment that can guarantee the investor an income until death. You can fund your annuity either with an upfront lump sum or through a series of payments. You would typically make either payment years in advance. An annuity can be an asset for extra income during retirement.

There are two types of retirement annuities: fixed or variable. The crucial difference between the two is the rate of return. Your returns on variable annuities may rise and fall depending on the stock markets. Fixed annuities, on the other hand, offer a predetermined amount on returns as soon as your insurer pays. Read a little more on the difference between the two here.

You can choose when and how you would like to be paid out. You might choose to pay in a lump sum and begin collecting returns immediately. Alternatively, you can make payments over a long period of time, allowing your money to acquire interest and possibly increasing your returns.

Who Should Invest?

Young people sitting in garden smiling together

As an effective money-saving tool, retirement annuities are a good option for anyone. You are never too young or too old to save for the future. That being said, you might be more inclined to look into a retirement annuity if you fall into specific financial categories.

People who are self-employed might benefit from a retirement annuity. Given that you are not receiving a pension fund from an employer, it’s a good way to invest in your future. It also ensures that you have something to fall back on if you stop running your business.

This doesn’t mean that you shouldn’t consider a retirement annuity if you are employed. This investment is a great way to supplement your income and boost your current savings. It also offers the opportunity to expand your investment portfolio.

Retirement Annuity Benefits

Now, for the best part, here are a few reasons you might consider investing in an annuity:

1. Life-Long Income

The obvious and most attractive reason for investing in a retirement annuity is an income that lasts until your death. This provides a sense of security. Most investments don’t offer this unless your personal savings are astronomical in size.

The rate of return will differ from plan to plan. As mentioned above, fixed annuities are more predictable than variable annuities. Remember, not all annuities have unlimited payments, so make sure you ask your insurer.

2. Tax Benefits

In terms of tax benefits, retirement annuities are definitely one of the most attractive products on the market. Firstly, you may deduct a limited amount of your contributions from your tax income at the end of every year.

Second, there is no tax on the interest earned on your savings. In fact, you only pay tax on the fund once you receive your returns. The tax is also considerably lower than the tax on your current income.

Lastly, with some products, up to R500 000 received as a once-off payment is tax free. All returns after that will only be taxed in proportion to what you draw each year.

Computer mouse on retirement annuity documents

3. Disciplined Savings

Let’s be honest, saving can be hard, not to mention long-term saving. The benefit of not being able to access your retirement savings until after a certain age is definitely a plus. Retirement annuities take away all the temptation of drawing from your nest egg.

They can also offer stability. Whether you are a first-time investor or a seasoned professional, an annuity is a guarantee. For the most part, they are immune from the fluctuations of the stock market, which leaves you with a dependable, limited-risk investment.

While they do have their pros and cons, retirement annuities are a great resource for saving. They can be one of many tools that help expand your investment portfolio. They are also a fantastic way to ensure safety and security for your later years.

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+27 11 839 2302

info@maysure.za.com

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Retirement Planning: A Goal We All Hope To Achieve

Retirement is something that most of us have dreamed about since our youth. Perhaps you envision traveling the country and soaking up the best that South Africa has to offer. Maybe you want to whittle away your days at a house on the dam, fishing and enjoying nature. Regardless of what ideal retirement looks like for you, retirement is a goal we all hope to achieve.

Just wanting and dreaming to be retired isn’t enough. In order to retire and actually enjoy your time in retirement, you need the right amount of money saved, invested, or otherwise available once you stop working. The exact Rand amount you need to retire will vary greatly depending on your personal needs. It may seem incredibly daunting to be saving for an extended period in your life where you will have no steady income, but don’t worry, with a bit of sound advice and planning, the retirement of your dreams is well within your reach.

According to the national Treasury, only 6% of South Africans can afford to retire comfortably – and this figure has been the same for the past 25 years, which means that people are simply not planning for their retirement properly, leaving them and their families high and dry.

If you want to have a successful retirement, you need to figure out what that means to you. Do some life planning for retirement, set goals and create a plan that allows you to achieve your retirement goals. Here are some handy tips to remember when making your retirement plans that include financial freedom.

Start saving at your first job – Beginning to save for retirement in your 20’s and 30’s allows you to start generating valuable compound interest that will accumulate over decades. Tucking away even a small amount will get you into the habit of saving for the future. Don’t worry if you are only starting to save later in life, starting at any time is a step in the right direction. Remember, the best time to start saving for your retirement was yesterday.
Save with every salary cheque – Create a monthly debit order right from the start. If you make saving automatic, you won’t be tempted to spend it or forget to make a contribution.
As you earn more, pay more – As your income grows, increase the amount you contribute to your savings. Some saving plans even offer automatic escalation, which will gradually increase your contribution amount over time.
Avoid unnecessary fees – Some retirement and investment accounts often charge fees for breaks or early withdrawals. Get to know the rules so that you can avoid triggering fees and penalties.
Pay off your short-term debt – Your retirement investments should not be used to pay off debts that you acquired during your journey. Short-term debt is one of the things that could derail retirement planning, so paying it off properly, and without dipping into your nest egg is important. Contact us on how best to do this.

The most important part of retirement planning is understanding that it is a life long commitment. Nurture your investments, if you luck out on a major windfall, contribute a portion of that to your savings, keep up to date on interest rates and ask for advice on potential income generating investments.

We want you to live your very best life, at every single stage. Let us assess your financial planning to ensure that even though you might be planning for the best future possible, you are still able to live your very best now. With sound financial advice it truly is possible to have the best of both worlds.

? 011 839 2302

? info@maysure.za.com