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 Randsure 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.
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 Randsure 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.
To find out more about the retirement annuities, contact us here:
+27 21 933 4170