Tips and Tricks for retirement planning

I am. Happy to give advice - always looking to help. What goes around - comes around. Do business online.
 
I am not a fan of RA's and UT's as they are a hindrance to capital growth. I had to build up my own pension via a management scheme but lost 50% in the 2008 fiasco. I only had R450k left after so I went on my own with 100% equities and never looked back.
I am now comfortably retired in Portugal and have been for 2 years.
A 100% equity portfolio is the only way to go. Dump the RA's and interest bearing instruments. They are shackles.
 
Oopsie said:
I am not a fan of RA's and UT's as they are a hindrance to capital growth. I had to build up my own pension via a management scheme but lost 50% in the 2008 fiasco. I only had R450k left after so I went on my own with 100% equities and never looked back.
I am now comfortably retired in Portugal and have been for 2 years.
A 100% equity portfolio is the only way to go. Dump the RA's and interest bearing instruments. They are shackles.
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A unit trust (100% in equities) or a RA (92.5% in equity/property equity) will not have capital growth?

And weren't you a proponent of industrial funds (as an alternative to your one share, high risk, that panned out, method)? So now suddenly they are bad? When and what made you change your mind?
 
R450 000 in 8 ( no 6 years as retired for 2 ) years led to a retirement in Portugal.
Anybody willing and able to do the math?
 
supersunbird said:
A unit trust (100% in equities) or a RA (92.5% in equity/property equity) will not have capital growth?

And weren't you a proponent of industrial funds (as an alternative to your one share, high risk, that panned out, method)? So now suddenly they are bad? When and what made you change your mind?
Click to expand...

The FSB restricts where UT's and RA's can invest. They have recently upped the equity portion when they finally realized that equities are safe over longer terms.
Yes, I did have a one share portfolio but that was with CML and not with industrial funds. I have now moved to Industrial funds in the form of index funds as I no longer want to keep check on my investments.
I do however have some stocks for alpha as index funds do not perform as well as some single stocks do.
 
Taking advice on retirement from people who have not successfully retired (atleast 10 years in my view or one economic cycle) is a bit like taking advice on sex from a virgin.
 
Oopsie said:
The FSB restricts where UT's and RA's can invest. They have recently upped the equity portion when they finally realized that equities are safe over longer terms.
Yes, I did have a one share portfolio but that was with CML and not with industrial funds. I have now moved to Industrial funds in the form of index funds as I no longer want to keep check on my investments.
I do however have some stocks for alpha as index funds do not perform as well as some single stocks do.
Click to expand...

Maybe you are talking about Portuguese unit trusts... :wtf: :confused:

If there are limits in SA UTs, the same regulations will apply to whatever other ETFs since they are all Collective Investment Schemes. And if anything changed recently, it was not covered in the financial press at all. Still don't know what restrictions UTs have in place that hinders capital growth... maybe you can tell us more about that Marco?

Yes, RA's have limitations but can still have it in good capital growth (personally would have preferred it if the foreign allocation was 50%), and one can have 92.5% in higher growth assets classes if one wants, in an RA, just pushing the Reg 28 limits.
 
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supersunbird said:
Maybe you are talking about Portuguese unit trusts... :wtf: :confused:

If there are limits in SA UTs, the same regulations will apply to whatever other ETFs since they are all Collective Investment Schemes. And if anything changed recently, it was not covered in the financial press at all. Still don't know what restrictions UTs have in place that hinders capital growth... maybe you can tell us more about that Marco?

Yes, RA's have limitations but can still have it in good capital growth (personally would have preferred it if the foreign allocation was 50%), and one can have 92.5% in higher growth assets classes if one wants, in an RA, just pushing the Reg 28 limits.
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I was specifically referring to UT's that fall under the Regulation 28 act.
! unit trusts which conform to the requirements of regulation 28.
The maxima are broadly:
! No more than 75% may be invested in equities
! No more than 25% may be invested in property
! No more than 90% may be invested in a combination of equities and property
! No more than 5% may be invested in the sponsoring employer
! No more than 15% may be invested in a large capitalisation listed equity, and
10% in any single other equity
! No more than 20% may be invested with any single bank
! No more than 15% may be invested off-shore
! No more than 2,5% may be invested in “other assets”. Derivative instruments are
not defined, leaving them to fall within this “other assets” category.
There is provision for the Registrar to exempt funds from some or all of these
maxima on prior written application.

As to fees. UT's have a far higher TER than Index Funds. A UT TER of 3% pa compared to the ETF TER of 0.17% is substantial over 10 years if compounded.
Some 3'rd party UT's have fees of 6% pa as do many FoF's.
 
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adielk said:
R450 000 in 8 ( no 6 years as retired for 2 ) years led to a retirement in Portugal.
Anybody willing and able to do the math?
Click to expand...

No math required. How well did CML do in that time? 1 600% or was it 2 000%? I only sold her a few months ago.
 
Oopsie said:
I was specifically referring to UT's that fall under the Regulation 28 act.
! unit trusts which conform to the requirements of regulation 28.
The maxima are broadly:
! No more than 75% may be invested in equities
! No more than 25% may be invested in property
! No more than 90% may be invested in a combination of equities and property
! No more than 5% may be invested in the sponsoring employer
! No more than 15% may be invested in a large capitalisation listed equity, and
10% in any single other equity
! No more than 20% may be invested with any single bank
! No more than 15% may be invested off-shore
! No more than 2,5% may be invested in “other assets”. Derivative instruments are
not defined, leaving them to fall within this “other assets” category.
There is provision for the Registrar to exempt funds from some or all of these
maxima on prior written application.

As to fees. UT's have a far higher TER than Index Funds. A UT TER of 3% pa compared to the ETF TER of 0.17% is substantial over 10 years if compounded.
Some 3'rd party UT's have fees of 6% pa as do many FoF's.
Click to expand...

Bolded: Max 25% offshore.

And then you should state you are talking about balanced UTs, as they are called. We must call thing by the right names so that we are all on the same page, and not just says all UTs are bad because they are limited with new rules. I can't point at my car and say "here is my dog".

And there are index UTs with TERs of 0.4 (incl VAT), balanced UTs even. Yes, there are very expensive UTs, buyer beware.
 
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,
Click to expand...

Start from your first salary if I knew/understood how important that is I would have been way head from where I am now already.
 
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