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.

Connie Bruwer van PC Bruwer en Vennote gee raad oor hierdie belangrike onderwerp.

Vraag:  Ek het onlangs gehoor dat 94% van alle Suid-Afrikaners nie finansieël sorgvry kan aftree nie.  Hoekom is dit so, Connie?

Connie:  Pensioenvoordele deur maatskappye voorsien, is waarskynlik onvoldoende om ten volle in ‘n persoon se aftreebehoeftes te voorsien. Inflasie verminder jou geld se koopkrag, wat beteken dat jy  met verloop van jare al hoe minder met ‘n gelykblywende inkomste kan koop. Met die vooruitgang in geneeskundige en mediese tegnologie, leef mense langer.  Die gemiddelde leeftyd van laerisiko mans en-vroue is tans 85 en 90 jaar onderskeidelik. Afgetredenes, wat geen bystand van hul voormalig werkgewers ontvang ten opsigte van bydraes tot hul mediese skema, dra ‘n geweldige las juis op ‘n tydstip wanneer hulle mediese versorging waarskynlik die nodigste het. Al hoe meer mense tree jonger af of neem ‘n pakket.  Jou aftreejare kan dus moontlik langer as jou werkende leeftyd wees.

Vraag:  Ons almal droom van aftreejare waarin ons die lewe geniet, maar die werklikheid is dat baie mense eindelik van die hand in die tand leef of van familie se gunste en gawes afhanklik is.

Hoe kan ‘n mens bereken of jou aftreespaargeld genoeg gaan wees vir ‘n kommervrye oudag?

Connie:  As jou lewensverwagting nog twintig tot dertig jaar ná aftrede is, moet jy seker maak jy het omtrent R20 gespaar vir elke R1 wat jy van plan is om in een jaar te bestee.  Byvoorbeeld, as jy R80 000 per jaar nodig het om te oorleef ná aftrede, moet jou pensioen en spaargeld R1,6 miljoen beloop.

Die berekening sluit egter nog nie die uitwerking van inkomstebelasting op jou kapitaal in nie.  As jy ‘n jaarlikse koers van 20 persent op jou belasbare inkomste moet betaal, sal jy R25 vir elke R1 van jou jaarlikse uitgawes nodig hê—dus moet jou pensioen en spaargeld dan R2 miljoen beloop.

Dan is daar inflasie om mee rekening te hou—dit veroorsaak dat jou geld elke jaar minder koopkrag het.

Teen die huidige inflasiekoers van 4 persent per jaar, sal die R80 000 wat jy nou het, volgende jaar minder as R77 000 werd wees.  Oor twintig jaar sal dit minder as die helfte van vandag se koopkrag hê.  Daarom is dit belangrik dat die beleggings waarin jy jou pensioen belê, minstens tred hou met inflasie.  Baie mense dink aandele is te wisselvallig en belê daarom hul aftreegeldjies in kontant.

Vraag:  Wat is die beste, aandele of kontant?

Connie:  Aandele groei op die lang termyn aansienlik meer as kontant.  Mits jy veilig speel, verbeter jy die kanse dat jy jou spaargeld gaan oorleef.

Neem byvoorbeeld iemand wat 5 persent van sy aftreegeld per jaar onttrek om van te leef ná aftrede.  As hy tussen 40 en 50 persent van sy aftreegeld in aandele belê, sal sy geld tien jaar langer hou as dié van iemand wat net tussen 20 en 30 persent van die fondse in aandele belê het.

Vraag:  Wat is die grootste fout wat afgetredenes maak?

Connie:  Die grootste fout wat afgetredenes maak, is om te konserwatief te belê as hulle nog ‘n lang lewensverwagting het.  ‘n Belegging in die grootste aandele op die beurs, wat ‘n relatief lae risiko bied en steeds behoort te groei, sal jou vêr bring.

Vraag:  Waarvan moet beleggers wegbly en waarvoor moet hulle pasop?

Connie:  Bly weg van die klein aandele wat die spekulante lok.

Nog ‘n fout is om te veel aan die begin van jou aftrede te bestee.  Een riglyn is dat jy nooit meer as twee persentasiepunte bo die inflasiekoers per jaar mag onttrek nie.  As inflasie 4 persent is, mag jy nie meer as 6 persent van jou spaargeld per jaar onttrek nie.

Vraag:  Hoe bereken jy of jy genoeg het om af te tree?

Connie:  Om te bereken of jy genoeg het om af te tree, moet jy uitwerk hoeveel jaarlikse inkomste jy ná aftrede gaan nodig hê.  Jou huis en motor behoort afbetaal te wees en jy gaan waarskynlik minder aan vervoer bestee, want jy hoef nie meer kantoor toe te ry nie.  Jy hoef ook nie meer pensioenbetalings te doen nie en jou belastingkoers behoort laer te wees.

Vraag:  Maar baie afgetredenes wil reis en het meer geld nodig, nie waar nie Connie?

Connie:  Volgens ‘n verslag van Absa bestee welgestelde mense sowat 20 persent meer ná aftrede as terwyl hulle gewerk het.

In teenstelling hiermee word diegene wat finansieel sukkel, gedwing om hul begroting ná aftrede te besnoei.

Vraag:   Wat is die grootste geldopvreter vir afgetredenes?

Connie:  Die groot geldopvreter is gesondheidsorg.  Onlangse plaaslike navorsing wys iemand wat op 65 met een afhanklike aftree, se gesondheidsorg vir die res van sy of haar lewe tot R650 000 kan beloop.  Vir ‘n tagtigjarige met ‘n gade is dit sowat R250 000.

Vraag:  Wat stel jy voor moet ons lesers doen?

Connie:  Nadat jy bereken het wat jou jaarlikse inkomste moet wees, kontak jou pensioenfonds om vas te stel wat hul projeksie is vir die uitbetaling wat die fonds met aftrede aan jou sal maak.  Daarmee moet jy ‘n pensioen koop.  Werk uit hoeveel jou ander beleggings werd sal wees nadat jou skuld afbetaal is en sit dan meer geld per maand weg, indien nodig.  Net 6 persent van alle Suid-Afrikaners spaar genoeg vir aftrede—maak seker jy is een van hulle.

Vraag:  Om af te sluit, watter wenk kan jy ons lesers nog gee?

Connie:  Maak seker dat die pensioen wat jy met aftrede koop, lewenslank uitbetaal word—anders sit jy dalk ná ‘n paar jaar sonder geld.

The post Hoe kan jy genoeg spaar vir jou aftrede? first appeared on PC Bruwer & Partners / Vennote.

Connie Bruwer from PC Bruwer and Partners gives advice on this important topic.

Question:  I recently heard that 94% of all South Africans cannot retire carefree financially. Why is this so, Connie?

Connie:  Pension benefits that are provided by companies, are probably insufficient to fully provide for a person’s retirement needs. Inflation reduces your money’s purchasing power, which means that over the years you will have less and less to be able to buy with an income equal to your current income. With the advances in medicine and medical technology, people are living longer. The average lifetime of low-risk men and women is currently 85 and 90 years respectively. Retirees, who have no support from their former employers in respect of contributions to their medical scheme, carries a heavy burden precisely at a time when medical care is probably the most important. More and more people retire early or take a retrenchment package. Your retirement years can possibly be longer than your working life.

Question:  We all dream of retirement in which we enjoy life, but the reality is that many people then live with the bare necessities or are dependent on family favors and sponsorships.

How can you calculate whether your retirement savings should be enough for a carefree old age?

Connie:  If your life expectancy was twenty to thirty years after retirement, you should make sure you have saved about R20 for every R1 you plan to spend in a year. For example, if you need to survive on R80 000 per year after retirement, your pension and savings should amount to R1,6 million.

The calculation, however, does not include the effect of income tax on your capital. If you have to pay an annual rate of 20 percent on your taxable income, you will need R25 for every R1 of your annual expenses – thus your pension and savings would be R2 million.

There is also inflation to be reckoned with – it causes your money to have less buying power every year. At the current inflation rate of 4 percent per year, the R80 000 you now have, will worth less than R77 000 next year. After twenty years it will have less than half of today’s purchasing power. It is therefore important that investments in which you invest your pension, at least keep pace with inflation. Many people think shares are too volatile and therefore invest their pension money in cash.

Question:  What is the best – shares or cash?

Connie:  In the long term, shares grow much more than cash. Provided you play safe, you increase the chances that you will outlive your savings.

Take for example someone that withdraws 5 percent of his retirement money per year to live from. If he invests between 40 and 50 per cent of his retirement money in shares, his money will last ten years longer than someone who only invests between 20 and 30 per cent of their funds in shares.

Question:  What is the biggest mistake retirees make?

Connie:  The biggest mistake retirees make is to invest conservatively as they have a long life expectancy. An investment in the largest shares on the exchange, which has a relatively low risk area and should continue to grow, will take you far.

Question:  What should investors stay away from and what should they be aware of?

Connie:  Stay away from the small shares that attracts speculators.

Another mistake is to spend too much at the beginning of your retirement. A guideline is that you are never to withdraw more than two percentage points above the rate of inflation each year. If inflation is 4 percent, you may withdraw no more than 6 percent of your savings each year.

Question:  How do you calculate whether you have enough to retire?

Connie:  To calculate whether you have enough to retire, you need to figure out how much annual income in retirement you will need. Your home and car should be paid off and you will likely spend less on transportation, because you do not have to go to the office. You no longer have to do pension payments and your tax rate should be lower.

Question:  But many retirees want to travel and need more money, is that not so Connie?

Connie:  According to a report from Absa wealthy people spend about 20 percent more in retirement than whilst they are working.

In contrast, those who are struggling financially, are forced to cut their budget after retirement.

Question:   What is the biggest money consumer for retirees?

Connie:  The big money consumer is health care. Recent local research showed that someone at age 65 who retires with one dependent’s health care bill for the rest of his or her life can amount to R650 000. For an eighty year old with a spouse, it is about R250 000.

Question:  What do you suggest the readers should do?

Connie:  After you have calculated what your annual income should be, you should contact your pension fund to determine what their projection for the pension fund payment will be with retirement. On the ground hereof, you must invest in a pension fund. Work out how much your other investments will be worth after your debt is paid off and invest more money per month, if necessary. Only 6 percent of all South Africans save enough for retirement, so make sure you are one of them.

Question:  To conclude, what other tip you can give our readers?

Connie:  Make sure that the pension fund you receive at retirement, pay out for the rest of your life, otherwise you might find yourself without money after a few years.

The post How can you save enough for retirement? first appeared on PC Bruwer & Partners / Vennote.