Tips and Tricks for retirement planning

akescpt said:
Kids are expensive yes. I have a ways to go before that.
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I kept my kids on my Med Aid and paid for them until they had decent jobs. Was unplanned...

That leads to...

Tip #3: Education: ensure that your kids are either well educated or well qualified (artisan types) so that they are self-sufficient as young as possible. This will make a significant difference to your own finances later in life.
 
Tip #4: Live somewhere that allows you to build wealth - generally a place with a high CoL and income to match that allows you to save at a higher rate and/or gain an expensive property. This gives you a lot of freedom when you want to retire, since you can then move back to the cheaper area you want to retire to.

E.g. If I was going to live a life where all the savings I could manage was to pay my house off, I would rather own a house in Sandton then a house in Swellendam at the point of retirement.
 
midnightcaller said:
I'm starting this thread for people to provide tips and tricks for retirement planning.

This is not intended to replace the need for a financial planner.

If you are nearing retirement or in retirement, please share your insights and experiences.

Thanks,
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You shouldn't definitely do it by saving money in a bank account... It not the most secure way to go as in life things happen and you might be forced to use that money prematurely but yet for very important reasons one day...
Think DEEP, do not blindly save INVEST instead!!!!
The advantage you get by investing is the fact you will own assets capable of generating cashflow which means in rainy days you don't have to worry about how mush you will have left as the money will always comeback again and again.

Don't do the same mistake as many have done before you.
 
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cguy said:
Tip #4: Live somewhere that allows you to build wealth - generally a place with a high CoL and income to match that allows you to save at a higher rate and/or gain an expensive property. This gives you a lot of freedom when you want to retire, since you can then move back to the cheaper area you want to retire to.

E.g. If I was going to live a life where all the savings I could manage was to pay my house off, I would rather own a house in Sandton then a house in Swellendam at the point of retirement.
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You will be better off with several properties that tenants have bought for you than a single property in Sandton.

Aim to retire with a combination of Property and Shares.

Or just read : http://mybroadband.co.za/vb/showthr...rican-Mr-Money-Mustache-early-retirement-guru
 
Billy said:
You will be better off with several properties that tenants have bought for you than a single property in Sandton.

Aim to retire with a combination of Property and Shares.

Or just read : http://mybroadband.co.za/vb/showthr...rican-Mr-Money-Mustache-early-retirement-guru
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You would also be better off with $10m in the bank. ;). The point of my post is that in a high CoL, high income, geographic area, whatever you do, even if it's as simple as paying off just one house, scales with that area. If you manage to buy 5 properties in Swellendam and rent them out to pay the bonds, that's great, but if you can do the same thing in Sandton, that would be even better.
 
cguy said:
You would also be better off with $10m in the bank. ;).
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I know people who use to think this way till they realised the mistake only later on in their life.

However as for owning houses in Sandton vs Swellendam... I agree with you.
 
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Something to all the folks wanting to save.

Look at your car/prospective car. Do you really need a fancy model, special engine etc? Do you? Why do you want a car? What is it's function to you.

Ask those questions before purchasing a car honestly to yourself and you will be better off.
 
Stian said:
I know people who use to think this way till they realised the mistake only later on in their life.
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I am sure that most people would rather have $10m in the bank, than several houses (of the type one can afford on a Swellendam income) in Swellendam. If you think that I was stating that money in the bank is better than that same amount of money in an investment, you missed the point entirely.
 
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I'm so happy about the new 27.5% tax deduction on all income. I will be upping my RA so that, together with my employer fund, I'm saving 25% of my before tax income (not 27.5% yet, I want to benefit from some of my previous 3 years of over contributions that have rolled over).
 
supersunbird said:
I'm so happy about the new 27.5% tax deduction on all income. I will be upping my RA so that, together with my employer fund, I'm saving 25% of my before tax income (not 27.5% yet, I want to benefit from some of my previous 3 years of over contributions that have rolled over).
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Can you please explain where this deduction comes in?

Thanks!
 
The pension you get from your company is not enough to retire on. I see way too many people at work thinking this.
Have a pension fund, RA, and a savings account that you can dip into in times of emergencies. And if you are smart enough, invest :)
 
Stevi said:
The pension you get from your company is not enough to retire on. I see way too many people at work thinking this.
Have a (1) pension fund, (2) RA, and a (3) savings account that you can dip into in times of emergencies. And if you are smart enough, (4) invest :)
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1+3 are absolutely essential

2 is very, very advisable

4 may be out of reach for many but is excellent if possible.
 
jsheed_sa said:
Can you please explain where this deduction comes in?

Thanks!
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An example from after 1 March 2016:

Say you have a employer pension fund and you contribute 15% of your gross salary to it, your payslip reflects that and your employer only deducts PAYE on your salary - 15%, so if you earn R100 00 per year, you only pay tax as if you earned R85 000

Now you can have a private RA is well. You contribute 10% of your gross salary to that (but your employer won't know or do the admin for that, so you don't get the immediate tax benefit).

So all together you are paying 25% of your income into retirement funds.

Come e-filing time in 2017, you will then get a nice tax refund on that RA contribution because in actual fact you should have been paying income tax on only R75 000, not on R85 000.

I hope my example is clear enough. In the past it was more complex depending on what type of retirement fund/s you were contributing to (RA, Pension Fund, Provident Fund).
 
I can comment on what has worked for me

Above any investment strategy, having a high savings rate is of vital importance and living well below your means.

Things I read on MyBB everyday shocks me to the core and how we justify expenses and lifestyle

max out your retirement contributions to fully utilize the new 27.5% tax deduction. Its money for jam and this new perk has effectively increased my salary with a good few grand every month. Freakin love it
 
MickeyD said:
1+3 are absolutely essential

2 is very, very advisable

4 may be out of reach for many but is excellent if possible.
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I got 1, 2, and 3 down. Started when I was young too (23):)
I do not have the knowledge, patience, or know how to do 4 :)
 
mountainboy said:
I can comment on what has worked for me

Above any investment strategy, having a high savings rate is of vital importance and living well below your means.

Things I read on MyBB everyday shocks me to the core and how we justify expenses and lifestyle

max out your retirement contributions to fully utilize the new 27.5% tax deduction. Its money for jam and this new perk has effectively increased my salary with a good few grand every month. Freakin love it
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Waiting for my next payslip to see how my employer provident fund is now handled in regard to the tax, I should be seeing a bit more Rs in my net salary.
 
I read somewhere a yearly lump sum contribution does better than smaller/monthly ones. So my RA will contribute whatever I put in my 32 day deposit savings 1 month before financial year is done.

Is this fine? Currently automatically pushing funds into my savings account to do this next year feb
 
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