We all love the idea of upgrades, whether it’s to business class, a cellphone package or lifestyle benefits.

But the real question is how do you ensure that you are able to at least maintain your lifestyle as you get older and retire? And most importantly, how do you avoid the downgrade that sadly faces over 94%* of South Africans?

You need to make smart decisions, and the good news is we are here to help and give you the advice you need to do exactly that.
 

Do you have a plan for your retirement?

Being able to support yourself comfortably after you retire is both a goal and a concern for many South Africans. Not saving in advance for retirement can have significant repercussions that impact your financial well-being and quality of life during your later years.

One of the retirement-saving options to help you achieve your retirement planning goals is a retirement annuity. This is ideal for you if you don’t have access to retirement benefits via your employer, or if you just want to boost your retirement savings. With a retirement annuity, you can benefit from tax efficiency, staying disciplined in saving and flexible contributions. But, based on your situation, we can advise you on the most appropriate ways to meet your retirement needs and achieve your goals and aspirations. 
 

Without advice, it is very easy to go wrong.

If it feels like things are always changing, that is because they are. Changes to legislation governing retirement funds are quite common. Sometimes you have to adjust your current plan to ensure you stay on track, considering these frequent updates in legislation about the tax implications and excess contributions. Our experienced and professional wealth managers have access to the latest regulatory insights and are equipped to advise you on the best options for your retirement contributions so that you can look forward to a comfortable retirement. Maybe that lifestyle upgrade isn’t out of your reach – or perhaps you want to be able to provide for your loved ones or leave a legacy.

Keep the following in mind when you consider making excess contributions:

1. The limit for contributions each year of assessment is currently 27,5% of remuneration or taxable income, capped at R350 000.
2. Excess contributions are beneficial from a tax point of view when it comes to income and lump sums. Although estate duty may be payable for the remaining excess contributions at death (to the extent that the beneficiary elected to receive a lump sum at death), if you keep the money in your personal name, estate duty would have applied to the full amount in any event.
3. If you want to retire with a retirement fund and need retirement income, you could consider making excess contributions to the retirement fund and transfer such amount immediately to a living (or life) annuity to ensure tax efficiency (which is limited to the extent of excess contributions).
4. Contributing substantial amounts to a retirement fund should not be done only to save tax. Also think about the overall advantages and disadvantages to make an informed decision.
    

These legislative changes and information may be a lot to keep track of – but that’s where we come in.

We are committed to connecting you to more. More advice, insights, and practical ways to be prepared to maintain your lifestyle as you approach your golden years. We hope that you will reach out to your wealth manager for a chat about this. In the meantime, go to our website and read our guide on excess contributions and the variety of updates and information.

* Retirement Gauge SA Retirement Gauge 2022 (oldmutual.co.za).

Want to know more about how we can advise on a comfortable retirement?

• Contact your wealth manager.
• If you’re not a client yet and want to find out more about how we can help you, we would love to hear from you. Contact us on 0800 111 263 or complete an online contact form.
  
• Find out more about our retirement offering.
    

Disclaimer
This information is for general information purposes only and is not legal advice.