You can manage your retirement plan more effectively by separating your retirement savings from all other savings (ie your child’s education, overseas trip, new car, new house etc)
You can use a retirement savings vehicle, such as your company pension/provident fund or a retirement annuity to ensure that your funding iro retirement is kept separately.
1. Retirement savings vehicle help keep your retirement money safe. You have limited access to these funds, you therefore need to ensure that you also have emergency funds for those unexpected events.
2. Creditors (people you owe money too) can’t claims funds held in any pension fund, provident fund or retirement annuity policy. However, legal changes allow payments to be made from a retirement fund, for example to an ex-spouse in the case of a divorce.
3. Tax benefits: You can invest up to 15% of your income into a retirement vehicle without having to pay capital gains tax or interest income tax on this investment. This tax saving has a significant impact on your final retirement nest egg. When you retire, you will not pay capital gains tax or interest income tax on money transferred to a post- retirement vehicle such as a living annuity. Only the monthly withdrawals are taxable as an income.
4. Since January 2009 there is no estate duty on approved retirement fund benefits, but if the benefits pays out as a lump sum, income tax will be applied.
5 Tips for Retirement Planning:
1. Choose 55 as your retirement age. You can always extend the age and it provides you with more flexibility around structuring your retirement.
2. Invest 15% of your bonus into a retirement vehicle to maximise the tax advantage.
3. You don’t have to convert to an annuity immediately on retirement. You can keep your money invested in a retirement product benefiting from tax-free growth until you need to draw an income.
4. When retiring, first use your savings you invested outside of your retirement vehicle. The income from these investments is generally not taxable if you did not receive a tax benefit when saving in those vehicles.
5. Once you’ve retired, keep savig a portion of your income so that you build a safety net for emergencies.
Monday, February 22, 2010
Wednesday, February 17, 2010
Estate Planning: Marital Regimes
Today we are going to focus a bit more on the different marital regimes as they can and will have a profound impact on your planning and a sound knowledge of what happens in your marriage as an individual will help you make the appropriate choice with your estate plan.
In our country the following marital regimes exist among others:
Marriages out of community of property without profit or loss: The parties have to conclude an ante- nuptial contract (ANC). An ANC is an agreement between the parties regulating the marital regime applicable to their marriage as well as any other conditions that may be applicable. In a marriage out of community of property without profit and loss, each spouse has a separate personal estate. Each spouse can therefore deal with their property as they wish during the marriage and by way of a Will & Testament.
Marriages out of community of property with inclusion of the accrual system: In terms of this system teh net accrual during the duration of the marriage is to be shared equally by the spouses at death or divorce and enables the spouses the opportunity to share equally in the value of the assets acquired during the course of the marriage. During the course of the marriage each spouse has his/ her own estate with which they can deal.
Net value of the estate at termination of the marriage
At the termination of the marriage the net value of the spouses' respective estates must be determined.
Certain assets are excluded:
In our country the following marital regimes exist among others:
- Marriages in community of property
- Marriages out of community of property
- Marriages out of community of property with inclusion of the accrual system
Marriages out of community of property without profit or loss: The parties have to conclude an ante- nuptial contract (ANC). An ANC is an agreement between the parties regulating the marital regime applicable to their marriage as well as any other conditions that may be applicable. In a marriage out of community of property without profit and loss, each spouse has a separate personal estate. Each spouse can therefore deal with their property as they wish during the marriage and by way of a Will & Testament.
Marriages out of community of property with inclusion of the accrual system: In terms of this system teh net accrual during the duration of the marriage is to be shared equally by the spouses at death or divorce and enables the spouses the opportunity to share equally in the value of the assets acquired during the course of the marriage. During the course of the marriage each spouse has his/ her own estate with which they can deal.
Net value of the estate at termination of the marriage
At the termination of the marriage the net value of the spouses' respective estates must be determined.
Certain assets are excluded:
- Any amount accruing to the estate in respect of compensation for damages, except any amount of compensation for patrimonial loss;
- any assets excluded from the accrual system by virtue of the ANC;
- bequests, legacies and donations accruing to a spouse during the course of the marriage;
- any donations between spouses.
Tuesday, February 16, 2010
Financial Health in Mid Forties & Fifties
Retirment is a scary thought. You are without an income for the most part, unemployable. If you aren't prepared, you face an uncomfortable and uncertain future.
Many business owners get so caught up in the running of their business, they forget to think about the future. But when it comes to retirement, you can't afford to seperate your personal finances from those in your business. At the same time, you have the well- being of your employees (for those of you that have employees). Even though there is no current law that you have to provide for their retirement, it's your moral duty to at least help them plan for the future.
None of us can predict the future. But you need to ensure that you are prepared for eventualities like death, disability, illness and dread disease. The reality is that they can hit you and your business or family hard.And imagine it happened to one of your partners, shareholders or employees. What if you lost them to death or disability? It's not a pleasant thought, but think of the capital you'd need to replace key employees, settle loans or buy out a partner. What if you didn't have enough? You'd risk losing everything you've worked so hard to create.
The older we get the more dificult it is to get this type of insurance. Is yours in place?
Each of us have different needs and goals in life. Therefore our financial solutions would differ. In our fourties we should know what our goals are, or at least have some indication as to how we're going to reach these goals? Or maybe you've reached most of your goals and you're ready to retire and travel the world? Have you got it all planned?
Your Will?
Your Medical Aid?
Financially sound, with enough options to cater for our needs, ie our needs get bigger the older we are?
Many business owners get so caught up in the running of their business, they forget to think about the future. But when it comes to retirement, you can't afford to seperate your personal finances from those in your business. At the same time, you have the well- being of your employees (for those of you that have employees). Even though there is no current law that you have to provide for their retirement, it's your moral duty to at least help them plan for the future.
None of us can predict the future. But you need to ensure that you are prepared for eventualities like death, disability, illness and dread disease. The reality is that they can hit you and your business or family hard.And imagine it happened to one of your partners, shareholders or employees. What if you lost them to death or disability? It's not a pleasant thought, but think of the capital you'd need to replace key employees, settle loans or buy out a partner. What if you didn't have enough? You'd risk losing everything you've worked so hard to create.
The older we get the more dificult it is to get this type of insurance. Is yours in place?
Each of us have different needs and goals in life. Therefore our financial solutions would differ. In our fourties we should know what our goals are, or at least have some indication as to how we're going to reach these goals? Or maybe you've reached most of your goals and you're ready to retire and travel the world? Have you got it all planned?
Your Will?
Your Medical Aid?
Financially sound, with enough options to cater for our needs, ie our needs get bigger the older we are?
Monday, February 15, 2010
How to choose a guardian for your children
How do we define a guardian?
A legal guardian is an adult that is appointed to look after your child should you and his or her other parent die before the child reaches maturity. The guardian will get custody of your child and must be named in your last Will and Testament. If you and your spouse or life partner have separate Will you should nominate the same person to avoid conflict.
Many parents also nominate an alternative person if their first choice is not willing or unable to accept the responsibility.
The right person for the responsibility
To choose the right person is not an easy task. First make a list of all the candidates and then you and your spouse or life partner can discuss the advantages and disadvantages of each person. The following should be considered:
1. Who’s parenting style, values and religious beliefs are closest to yours?
2. Who is in the best position to accept the responsibility of caring for a child- emotionally, financially, physically?
3. With whom does the child feel comfortable already?
4. Would your child have to move and would that cause problems?
5. Does the person you are considering have other children? If so, would your child fit in or be left on his/ her own?
Does the person have enough time and energy to give to your child?
Task
Ø Talk to the “candidates” and find out if they would be willing to take on such a responsibility
Ø Write down your wishes and your dreams for your child and attach the letter to your last will and testament. Consider the most important things like education, religion values etc.
How do we define a guardian?
A legal guardian is an adult that is appointed to look after your child should you and his or her other parent die before the child reaches maturity. The guardian will get custody of your child and must be named in your last Will and Testament. If you and your spouse or life partner have separate Will you should nominate the same person to avoid conflict.
Many parents also nominate an alternative person if their first choice is not willing or unable to accept the responsibility.
The right person for the responsibility
To choose the right person is not an easy task. First make a list of all the candidates and then you and your spouse or life partner can discuss the advantages and disadvantages of each person. The following should be considered:
1. Who’s parenting style, values and religious beliefs are closest to yours?
2. Who is in the best position to accept the responsibility of caring for a child- emotionally, financially, physically?
3. With whom does the child feel comfortable already?
4. Would your child have to move and would that cause problems?
5. Does the person you are considering have other children? If so, would your child fit in or be left on his/ her own?
Does the person have enough time and energy to give to your child?
Task
Ø Talk to the “candidates” and find out if they would be willing to take on such a responsibility
Ø Write down your wishes and your dreams for your child and attach the letter to your last will and testament. Consider the most important things like education, religion values etc.
Friday, February 12, 2010
Welcome!
My name, as you most probably have noticed, is Mitzie Ginsburg. I work in the Insurance Industry and would like to share my thoughts on this blog in the future. My goal is to answer all questions that may arise from the public as well as listen to people's honest opinions. I have been a board member/ chairperson at the FPI (Financial Planner Institute of South Africa) for quite a couple of years and have decided to step down and focus more on the quality of service delivery for my own clients as well as to give advice to to those who are in need.
Please feel free to ask questions!
This blog will grow during the next couple of weeks as there are even more amazing things to share!
I will be making contributions to a charity in the future, but I need you guys to tell me which charity should be assisted and why. I will find it extremely helpfull
Take Care!
Mitzie
Please feel free to ask questions!
This blog will grow during the next couple of weeks as there are even more amazing things to share!
I will be making contributions to a charity in the future, but I need you guys to tell me which charity should be assisted and why. I will find it extremely helpfull
Take Care!
Mitzie
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