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Is retirement an out-of-date pipedream? With rising living costs and economic uncertainty in South Africa, it’s not surprising that people feel this way. But what we see as “retirement” is changing, the traditional retirement age of 65 has already started to look different because people live longer. We live in a time where passive income and part-time work is as easy as ever and done from anywhere. Although retirement is continually evolving it still is more important than ever to start investing as early as possible and stay consistent over the long-term. Employer matching your pension contributions, should you max it out? Yes definitely. It’s free investment allocations and effectively instantly doubles your contributions. The higher the contributions, the better the compounding effect of the capital. You can also deduct your employer’s contributions together with your own contributions in your annual income tax returns. Are there other ways to supplement your retirement income? There are many discretionary investment structures (non-retirement) that hold massive tax-and estate planning benefits. It's always a good idea to diversify in the structures that you use to invest because they can be so different. This is true for the actual assets as well, never have your eggs in one basket. Building a business or renting out property can also be effective but holds it’s own risks. Should you pick the most aggressive investment option for retirement? If you have time on your side, going more aggressive is the optimal long-term strategy if you can stomach short-term volatility in assets like shares. In South Africa, all pre-retirement structures must adhere to Regulation 28 of the Pension Funds Act and this does limit the level of risk you are able to take with your retirement funds, but alternative structures can supplement your risk appetite. Time in the market is always better than trying to time the market. What are common retirement investment mistakes? Starting too late. Not saving enough, at least 20% of your monthly income should be invested. Regularly switching between different funds and assets due to short-term volatility (bad investor behaviour). A lack of diversification. Failing to adjust your plan as you go – marriage, kids and inflation play a role. Ruvan J Grobler RFP™

Saving for retirement has become somewhat unappealing for many investors. This is due to the lack of flexibility and many moving parts that make it complex. Treasury has been trying to combat the flexibility issue with the introduction of the two-pot system in September 2024. These structures do however have major tax advantages. According to Section 11F of the Income Tax Act, you are allowed to deduct annual contributions made to any pension fund, providend fund or retirement annuity fund. The annual limits are set out as follows to the lesser of: (i) R350 000; (ii) 27,5% of the higher of – • remuneration; or • taxable income; or (iii) taxable income of that person before – • including any taxable capital gain. According to the provisions set out in Section 10C of the Income Tax act, contributions from previous years that were not deductible at the time will be carried forward to the current assessment year unless they were deducted from a retirement fund lump sum, withdrawal benefit, or offset against a compulsory annuity. Arrear contributions are added to the current year's contributions and treated accordingly. Ultimately, these disallowed contributions can be used to offset retirement income until the rollover is depleted. Because it is seen as a deduction against gross income, planning can be done in such a way that no income tax is payable for many years into retirement. The disallowed contribution can also be used to increase the tax-free portion of your 1/3 allowable retirement lump-sum. Important Considerations Upon the investor’s death, the beneficiaries of the annuity will have a choice. They may either take their portion in cash and pay the withdrawal tax, or they can proceed with the annuity. If they decide to take their portion in cash, that portion of the annuity will unfortunately be included in the estate. This consideration will make disallowed contributions less attractive for investors with offshore beneficiaries. Ruvan J Grobler RFP™ (PGDip Financial Planning)

March marks the start of the new Financial Year. It gives us a time to reset and evaluate the first 2 months of 2025. January and February are historically the 2 busiest months in the financial industry as clients set to get their finances in order and minimise their tax burden, mostly via Retirement annuities and Tax-Free savings. March now gives us the opportunity to start with a clean slate, to re-assess our new year's resolutions: What work and what didn’t. It’s a chance to not only set new goals but to create the right habits and systems. Over the decades so many get rich quick schemes ruined so many lives. Looking backwards it's easy to see that it was a fraudulent scheme, yet in the present, many people still get caught. We lack the discipline and patience. There are essentially 5 ingredients to guaranteed wealth creation: How early you start How much you invest The returns of the market How long you stay invested for & The withdrawals you make. 4 of these are entirely within our control, and we have more power than we think. However, it's when we try and speed up the system that things go wrong. Look after your money, don't just trust anyone and if it promises above 10% guaranteed return, be very careful. We will share more on this topic in one of our Podcast episodes, coming soon..

Gewoontes speel ’n beslissende rol om ’n gelukkige aftrede te verseker.. Nie alle mense het gedurende hul werkende loopbaan die regte gewoontes gevorm om hul volle potensiaal as afgetredenes te kan bereik nie. Hoe kan die regte gewoontes gevorm word? Deur die boek, “Gewoontes vir Gelukkige Aftrede” te lees, is ’n goeie beginpunt. Die boek is geskryf deur Riaan Botha en word uitgegee deur Bovest Wealth Management vir die gebruik van Bovest kliënte. Die inhoud van die boek gaan in die volgende nuusbriewe bespreek word. Hierdie boek gee erkenning aan die talle Bovest-kliënte wat oor die jare die gewoontes gevorm het om gelukkig te kan aftree. Hulle is vir ons ’n voorbeeld van mense vir wie aftrede die hoogtepunt in hul lewens is. Aftrede is onteenseglik ’n belangrike fase in ons lewens, en waarskynlik die belangrikste. Aftrede verg beplanning en beplanning is die gevolg van goeie gewoontes. Ons raad aan afgetredenes en mense wat beplan om af te tree, is om goeie gewoontes te kweek om hulle op die pad na ’n gelukkige aftrede te lei. Om gelukkig af te tree is egter nie ’n gegewe nie. Jy benodig persoonlike doelwitte wat opgevolg moet word met die begeerte om die nodige regte gewoontes aan te leer. Dit vereis dikwels dat jy bereid moet wees om van jou gevestigde gewoontes te verander. In die soeke na jou persoonlike geluk gaan jou gewoontes uniek wees.

There will always be a price to pay when you want something. With most things in life, you will pay a monetary fee for the things you want or need. If you want returns from your investments, you will need to pay a psychological fee. You will need patience, perseverance, grit and determination to enjoy the fruits of your investments. The S&P500 delivered returns of 678% since 1996. When you look back at it you may think it was easy to make the returns, all you had to do was hold on to your investment. If you invested early 2000, you would’ve had to wait more than 13 years for your capital to return to it’s initial level. My patience has never been tested for 13 years, but I tip my cap to whoever held onto their investment for this long. The good news is that this person would’ve enjoyed an average return of over 20% each year.  If you invested just before covid hit in 2020, you would now have enjoyed returns of over 70%. The big kicker is that your fund would have lost more than 30% of it’s value in 4 months. You needed to stay extremely calm during this time because everyone thought that the world was going to end.