At this time of year many people are reflecting on what went well and what did not go well during 2023, and setting goals for 2024. The author does not believe in "new year's resolutions" but rather in setting powerful goals.
1. Failing to have a financial plan
We see a lot of people who have bought financial products but who do not have a financial plan. Many people spend more time planning vacations than planning their finances. A financial plan provides clarity and direction, helping you know where you stand and how to reach your goals effectively.
What is an emergency fund?
An emergency fund is an investment or bank account containing money to be used only in the event of an emergency, such as losing your job, having to make an unexpected car repair or any other unexpected expense.
On 10 October 2023, South Africa’s Constitutional Court delivered groundbreaking judgments in two separate but interconnected cases, both challenging the constitutionality of section 7(3) of the Divorce Act of 1979.
Before this ruling ANC without accrual marriages effectively resulted in two seperate estates or what is known as "what is mine is mine, and what is yours is yours". This is no longer the case!
The cost-of-living crisis has put a financial strain on individuals and families, making it even more crucial to make smart financial decisions, especially during the holiday season. As the holiday's approach, the pressure to spend can be overwhelming, but it's essential to recognise the importance of saving money during this time.
With rising prices and economic uncertainties, making prudent choices and finding creative ways to save can make a significant difference in our financial well-being.
Here are seven tips to help you save money during the holiday season:
We have written about this crucial aspect of financial planning before.
It is reported that 70% of working South-Africans do not have a will!
Investors have lost about R3 billion in the latest Ponzi scheme, BHI Trust.
A Ponzi or pyramid scheme utilises the funds from new investors to provide returns to existing investors, often promising returns exceeding market rates. When the scheme fails to attract enough new investors, it inevitably crumbles, resulting in substantial losses for those involved.
Financial planning is a journey not a destination. An advisor and client should work together over time to build a portfolio
where the client is protected against certain risks and builds wealth.
The third pot in the two-pot retirement system is the retirement fund.
This depends on the type of retirement fund/s that you are a member of.
You can withdraw this money when you retire. You can withdraw, for emergencies, a minimum of R2 000 (before fees and taxes) once a tax year without leaving your employer.
As mentioned in previous blog posts, the PWG philosophy is to have as many contracts with product providers as possible.
Our life, disability, and critical illness partners are:
BrightRock
Discovery
Momentum
Sanlam
Old Mutual
Hollard
PPS
Bidvest Life
Clientele
Elevate and
Liberty
Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. should you need any advice with regards to or our suite of products, services and solutions.
Author: Anton Schutte: Talent and Recruitment Manager and Certified Financial Planner CFP®: PWG Group
In this edition of our blog, we will look at the first component of the two-pot retirement system, namely the vested pot.
At PWG we believe in having as many contracts with product providers as possible to provide our clients with suitable advice and options.
A Discretionary Fund Manager or ‘DFM’ exercises their professional discretion to buy and sell investments on your behalf.
This is in contrast to an advisory mandate in which you, as the client, are asked to approve recommendations in advance.
Discretionary Fund Managers argue that their autonomy enables them to:
Medical aid cover has become expensive, and we all know that consumers are under pressure. Furthermore, contributions increase at a higher rate annually than inflation.
We have specialists who can advise you on the most suitable option, considering your needs, circumstances, and affordability. We offer options with all the open medical aid schemes.
Why we need the Two-Pot Retirement System:
The intention of the Two-Pot legislation is to enforce a level of retirement savings preservation; and thereby ensure that retirement savings are retained for the purposes of retirement, even when someone leaves an employer. Members who are dire straits often resign from their employer to access their retirement savings. This two-pot intervention is desperately needed, with only a small portion of members currently preserving retirement savings, typically resulting in a replacement ratio in retirement which falls far short of the 70% generally required (the replacement ratio is the income goal after retirement as a percentage of the member's pre-retirement gross (before tax) earnings.
We seldomly consult with clients who don't already have some risk, investment, and other financial products and solutions in their portfolio. We find that, in the vast majority of cases clients have bought products but don't have a proper financial roadmap which is reviewed regularly.
Working towards someone else’s goal
Two individuals will have different financial goals and dreams. Whatever your individual goals may be, you need to work towards finding common financial ground on which to start building your life together and ensure that both sets of goals are fairly represented.
At PWG we usually follow a 10-step process when advising our clients:
The 10 Steps are:
Expertise and knowledge: In a highly technical and complex environment the financial planner's expertise and knowledge is crucial in protecting you against certain risks and to help you build wealth.
There is no age cap from when a person can become a member of a retirement annuity fund. Benefits however are only available from age 55 onwards (at any age after 55) unless the member dies, becomes permanently disabled or the fund value is below R15 000.
PWG had a stall at the 2023 Beeld retirement expo held on Saturday 10 and Sunday 11 June 2023 at The Maslow, Time Square, Menlyn Maine, Pretoria.
It was an opportunity to showcase our company, our advisors and our suite of products and solutions.
Our Risk and Wealth Planners and our Short-Term Advisors worked in shifts to connect with and answer questions from the public.
PWG offered a R5 000 lump sum Retirement Annuity Prize on a lucky draw basis. The prize winner could utilize the prize for him- / herself, a child or grandchild.
Compound interest over the long term can make a huge difference in the life of a child or grandchild!
The future value of a R5 000 lump sum exits annuity with no further contributions, at 10% investment return per year over different terms:
|
Term |
Future value |
|
10 years |
R12 968 |
|
20 years |
R33 637 |
|
30 years |
R87 247 |
|
40 years |
R226 296 |
|
50 years |
R586 954 |
The future value of a R300, R500 and R1 000 per month exit annuity that rises at the rate of inflation (6%) per year, at 10% investment return per year over different terms:
|
Term |
R300 pm contribution future value |
R500 pm contribution future value |
R1 000 pm contribution future value |
|
10 years |
R76 117 |
R126 862 |
R253 725 |
|
20 years |
R333 744 |
R556 241 |
R1 112 482 |
|
30 years |
R1 109 767 |
R184 961 |
R3 699 224 |
|
40 years |
R3 315 632 |
R5 526 053 |
R11 052 107 |
|
50 years |
R9 382 820 |
R15 638 034 |
R31 276 068 |
Feel free to contact us for a free consultation re the above or any other financial needs and services you may have.
Many people aim to retire at the age of 60 in the hopes that they’ll still be fit and healthy enough to enjoy an active retirement. While there’s a lot to be said for retiring early, it’s important to keep in mind the potentially extensive retirement period you will need to fund for, and the multitude of eventualities you could be faced with over what could well be a period of 40 years.
Here are six things to consider before retiring.