“Two main categories of people are needed in your circle; those who give you the necessary support to accomplish your dreams and those who become beneficiaries of what you achieve.” (Unattributed) Pension and provident funds and retirement annuities All retirement funds are governed by the Pension Funds Act, which prioritises financial dependants when distributing death…
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Imagine two people who both retire with savings of R5 million. Both of them decide to take an income of 5% of their starting capital per year, which would be R250 000. For the first five years, the first investor receives annual returns of 15%, 7%, 0%, -7% and -15%. The second investor gets the…
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“Many drops make a bucket, many buckets make a pond, many ponds make a lake, and many lakes make an ocean.” (Percy Ross) According to a recent survey by Just SA, only 11% of South Africans over the age of 50 feel “really confident” that their savings will last if they live to 100. For…
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What is Regulation 28 The management of retirement funds is highly regulated – as it should be. After all, these are your life savings we’re talking about! The key piece of legislation governing how retirement funds can be invested is called Regulation 28 of the Pension Funds Act. It limits the amounts that can be…
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Why don’t entrepreneurs diversify for retirement? Apart from optimism, confidence and risk tolerance, the main reason entrepreneurs keep reinvesting in their businesses as opposed to building up a separate investment portfolio, is that they believe that the return on capital from the business is greater than the return on other investments. The concept of retirement…
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The basics If you’ve never heard of the 4% rule, now would be a good time to acquaint yourself with it. The rule of thumb states that: If you withdraw 4% from your retirement portfolio annually (adjusted for inflation), your savings will last for 30 years. (Assuming that you’ve invested in a balanced portfolio, comprised of…
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