Blogs

The Government of National Unity (GNU) was formed between the African National Congress (ANC) and nine other political parties. The GNU governance structure was established after the 27 May 2024 national and provincial elections during which no political party obtained a 50% plus vote. In his inauguration address on 19 June 2024, President Ramaphosa describe the GNU as the beginning of a new era in South African politics. The previous GNU was formed in 1994 and dissolved in 1999. The aim of the previous GNU was to govern through consensus seeking and not governed by the winner take all approach. The vision of this GNU is to set South Africa on a path towards social cohesion and nation-building. This political shift has fostered optimism around the country’s economic future. The collective effort from politicians to participate in GNU was welcomed by business and the relationship between the private sector and government has been improved. A positive vibe was created on the local financial markets and the South African Rand broke R18 to the US Dollar. The performance of the local asset classes from 1 June 2024 to 30 September 2024 were: The JSE All Share Index rose with 12.83% SA All Bond Index increased with 16.29%. Listed Property Index Tracker Funds increased 25.77% Money market rates saw a 0.25% decline. The GNU was not the only factor that influenced the prices of asset classes and other economic indicators, like interest rates, also played a role. It is however the positive economic sentiment that GNU has created through the collective decision-making process from different political parties that played a positive role in the minds of investors. The way forward? In the short term we could expect that investment portfolios will perform above average depending on that the economy performed well, and that earnings of listed companies increases. What is the lifespan of this GNU? The previous political collective decision-making structure survived for 5 years. In the nineties South Africa had a dominant political party in Parlement as well as a better performing economy. However, this time is different, and a performing economy with prosper financial markets could create a scenario that it is better for political parties to be part of GNU than to be left out. Dr AP Botha 21 October 2024

The below is a basic scenario I recently worked on for a client. The individual had around R7mil in the specific Retirement Annuity and needed R55k per month after tax as income from it. One of his concerns was if he should take the 1/3 lump sum allowed or if he should reinvest his entire retirement savings in a post-retirement structure. The below looks at these two scenarios. There are many complexities around structures, disallowed contributions, asset allocation and income percentages that are ignored and simplified in this example. Scenario 1: Invest full retirement savings in post-retirement product. First year income: R77 000 (R924 000 annually) After tax: R55 062 (R660 744 annually) Monthly tax payable: R21 938 Scenario 2: Take R900 000 in cash and reinvest in flexible investment. Lump sum after tax: R825 300 Voluntary income from lumpsum : R10 000 (R120 000 annually, no income tax on withdrawal) Retirement Lump Sum tax table:

Agtergrond Die toekoms is onbekend en daarom bestee internasionale beleggingshuise groot bedrae geld om te voorspel wat in die toekoms op beleggingsmarkte gaan gebeur – sonder veel sukses. Om persoonlike welvaart in ‘n onseker wêreld te skep verg ‘n plan asook persoonlike dissipline. Die volgende persoonlike plan word voorgestel:

Investment fees should not be difficult to understand and must at all times be transparent. Many years ago, this was not the case but in recent years the industry has standardized the terms and set out clear limits.

Agtergrond