Connie Bruwer van PC Bruwer en Vennote gee raad rakende aftreebeplanning

Vraag:  Baie mense aan die vooraand van aftrede staan voor die kwelvraag of hulle wel nou sal kan aftree, gegewe die huidige negatiewe markomstandighede.   Wat is jou antwoord op hierdie vraag, Connie?

Connie:  Die antwoord op dié vraag hou glad nie verband met die beweging van markte die afgelope jaar nie. Dit word hoofsaaklik bepaal deur die spaarpatroon in jou werklewe en tweedens deur die lewenspeil wat jy ná aftrede wil handhaaf.

Dus speel aftreebeplanning ’n belangrike rol.

Mnr. Kobus Sadie van Verso Investment Services sê ’n kontantvloeimodel gee ’n duidelike aanduiding of iemand kan aftree en met watter gemak.

Vraag:  Wat kan aanvanklike aftreebeplanning omvergooi?

Connie:  ’n Skielike verandering in werkomstandighede wat lei tot vroeë aftrede kan die aanvanklike beplanning omvergooi. So byvoorbeeld moet ’n luisteraar wat 57 jaar oud is, einde vanjaar vroeg aftree ná 20 jaar diens. Die waarde van die vastebydraefonds het weens die daling in die markte met ’n paar honderdduisend rand gekrimp. En skielik lyk die plan om einde vanjaar af te tree nie so voordelig nie.

Mnr. Johan Strydom, welvaartbeplanner by Citadel, sê ’n mens hoef nie die tydsberekening van aftrede te bepaal na gelang van die stand van die markte nie. Enige annuïteit wat hy nou koop, koop hy teen dieselfde vlak as waarop hy sy pensioengeld aan die markte onttrek. Die belangrikste is om nou ’n behoorlike raamwerk op te stel, waarbinne toekomstige beleggingsbesluite geneem kan word.

Vraag:  Watter belangrike vrae moet mense in dié posisie vra?

Connie:  Belangrike vrae wat mense in dié posisie moet vra, is of hulle enigsins kontant moet onttrek en indien wel is dit wys om in iets soos eiendom te belê?

Ook moet in gedagte gehou word dat mense ál hoe langer lewe. Gegewe die langer lewensverwagting is dit moontlik om wel al op 57 jaar af te tree? Indien iemand nog elders ’n inkomste kan verdien, is dit ook ’n moontlikheid om die pensioengeld na ’n bewaringsfonds oor te dra.

Vraag:  In die beplanning vir aftrede, waarvoor moet nog voorsiening gemaak word?

Connie:  In die beplanning vir aftrede moet voorsiening gemaak word vir ’n noodfonds en ander kapitaaluitgawes (soos die aankoop van motors) gedurende aftrede.

Sou twee derdes van die pensioengeld in ’n lewensannuïteit belê word, is die onttrekkings beperk tot tussen 2,5% en 17,5% per jaar en die inkomste is ten volle belasbaar.

Die onttrekkings voorsien die inkomste. Ad hoc-onttrekkings kan nie gedoen word nie. As ’n derde in kontant onttrek word by aftrede sal dit ook voorsiening moet maak vir hierdie behoeftes en dit sal dalk nie raadsaam wees om dit vas te maak in enige belegging, ook eiendom, nie.

Daarby word die bedrag wat in kontant geneem word belas. Die eerste R550 000 is belastingvry, met die volgende R220 000 belasbaar teen 18%. Die daaropvolgende R385 000 word belas teen 27% en die restant sal teen 36% belas word.

Die geld wat in kontant geneem word, kan help om die onttrekking uit die lewensannuïteit so laag moontlik tot aftree-ouderdom te hou om inkomstebelasting tot die minimum te beperk.

The post Aftreebeplanning first appeared on PC Bruwer & Partners / Vennote.

Connie Bruwer from PC Bruwer and Partners advises about Retirement Planning

Question:  Many people on the eve of retirement have the anxious question of whether or not they will now be able to retire, given the negative market conditions. What is your answer to this question, Connie?

Connie:  The answer to this question holds no relation to the movement of markets over the past year. It is mainly determined by the savings pattern in your work life, and secondly by the standard of living you want to maintain after retirement.

Therefore retirement planning plays an important role.

Mr. Kobus Sadie of Verso Investment Services says that a cash flow model can give a clear indication of whether a person can retire and with what ease they will be able to live in the future.

Question:  What can overthrow initial retirement planning?

Connie:  A sudden change in working conditions leading to early retirement may upset your initial planning. For example, an individual who I know well, and is only 57 years old, has to retire early after 20 years of service. The value of his defined contribution due to the decline in the market has shrunk with several hundred thousand rand and suddenly the plan for early retirement, does not seem so beneficial anymore.

Mr. Johan Strydom, wealth planner at Citadel, says one does not need to determine the timing of retirement in terms of the state of the markets. Any annuity that he now buys, he buys at the same level as when he withdraws his pension money in the markets. The most important thing is to draw up a proper framework within which future investment decisions can be taken.

Question:  What important questions should people in this position be asking?

Connie:  Important questions that people should ask in this position is if they should withdraw their cash and, if so, it is wise to invest in something like real estate?

It should also be borne in mind that people live much longer than in the olden days. Given the longer life expectancy, one should ask the question – is it still possible to retire at 57 years? If one can earn another income after retirement, one can also put your pension money in a conservation fund.

Question:  When one does retirement planning, what must be provided for?

Connie:  In planning for retirement, provision must be made for an emergency fund and other capital expenditures (such as the purchase of cars) during retirement.

Should two-thirds of the pension money be invested in a life annuity, the withdrawals are limited to between 2.5% and 17.5% per year and the income is fully taxable.

The drawings provide the income. Ad hoc withdrawals cannot be done. If a third of the money is withdrawn at retirement, one will also have to provide for these needs, and it may not be advisable to tie it in any investment, including real estate.

In addition, the amount drawn in cash, will be taxable. The first R550 000 is tax-free, with the next R220 000 taxable at 18%. The next R385 000 is taxed at 27% and the remainder will be taxed at 36%.

The money that one will taken in cash, can help to keep the withdrawal of the life annuity as low as possible until a suitable retirement age and will also keep income taxes to a minimum.

The post Retirement Planning first appeared on PC Bruwer & Partners / Vennote.

REAL, DO-ABLE WAYS TO GET OUT

You’ve got a great job, a flourishing career and are finally earning a decent wage – so why is it you still struggle to make ends meet each month? Which of us hasn’t stalled an account payment, had a credit card rejected, or fobbed off the family with fishfingers the week before pay day? The reality is that if you’re doing any of these things, you’re courting debt, and the consequences can be cruel. Credit judgements have reached an all-time high, and some 1,2 million women have court judgement information recorded against them by one major South African credit bureau alone – information that will stain their credit profile for five years. Are you financially free or a walking overdraft?

Check the signs:

• You are unsure exactly how much you owe and are afraid to add it up;
• You have more than four monthly accounts, including retail store and credit cards;
• You miss account payments, and pay only the minimum or less on your credit cards;
• You often juggle bills, and pay some or all of them late;
• You postdate cheques so they don’t bounce;
• You get calls and overdue notices from creditors;
• You have reached the limit on your charge cards;
• You have increased your number of credit cards;
• You are getting cash advances from one credit facility to make payments on others;
• You have stopped contributing to a savings plan, perhaps even eroded your emergency fund – set aside for the unexpected, like a fire or being fired.

If you have identified with two or more of these points, you might be on your way to Debtsville.

Do the sums. How much do you owe?

• Include accounts, credit cards, car and home loans, the works. Be honest. How about your best mate, your mom or anyone else you’ve been sponging from?
• Pay off smaller accounts first, followed by accounts with the highest interest rate. Call the company and ask them to reduce their rate – tell them you will transfer the amount to another card if they don’t.
• Talk to your bank manager and arrange an overdraft facility – overdrawing without one is not just embarrassing, it can affect your credit rating.
• Check that you’re paying the lowest possible rate of home loan interest, and know how much your monthly repayments will increase if rates go up.
• If you do all your banking though one bank (home loan, cheque account, savings etc.) you should qualify for a small reduction in your home loan base rate and possibly for lower service fees – ask.
• Consider life cover, retrenchment or disability insurance on your home loan.
• Where is your money going? Everyone needs to eat, a roof over your head and clothes (so don’t beat yourself up for buying a suit when you need it). But if you are in debt, you are spending too much on something, so find out what it is.

There are ways out of debt, if you act fast

• If your debts have mounted to where your monthly loan repayments are more than 20 percent of your income, create a money plan.
• Go to the people you owe money to. Show them your plan, be honest about your financial situation and get a written agreement from each creditor who is willing to give you more time. Most businesses will respond positively to an honest approach. Stick to your agreements even if it means cutting your living costs to the bone – you’ll be surprised to see how quickly you pay off your debts.
• Resist the urge to borrow money to pay debt. Interest and admin fees will be charged and your monthly repayments could become even higher.
• Don’t ignore those letter demanding payment.
• Keep track of your money and never throw away a receipt.
• Look into getting a software package like Microsoft Money to help you keep track of what goes where
  Reconsider your approach to credit cards – a debit card may be better
• Draw up a detailed budget and stick to it. After your rent or bond payment, save at least 10 percent of your salary, divided between long, medium and short-term plans:
  • Long term, you should have a retirement annuity in addition to your company pension fund.
  • Short term, savings for an emergency fund (car repairs, holiday etc.).
  • Once this totals R10 000, transfer all excess from then on into medium term savings: fixed deposit, or unit trusts that can be accessed in a matter of days should you face a major emergency.

The post Debt Management first appeared on PC Bruwer & Partners / Vennote.