Top up RA now, or wait?

[zerocool2009]

If you want to topup, might be good now. Think the downgrade has been worked in already too

 

[backstreetboy]

 

[zerocool2009]

I read this now :

"
Section 13A of the Pension Funds Act compels employers to pay the retirement fund contributions deducted from an employee’s salary as well as the employer’s contribution to the retirement fund in question within seven (7) days of the end of the month for which such contributions are being deducted. A failure to comply renders the directors of the company personally liable for the payment of such amounts. In addition it constitutes a criminal offence with severe penalties.
"

 

[bchip]

Get it out how? You’ll get at tax on it to the max which would negate every little bit of investment you ever made and in the current climate probably a huge loss.

Get it out how -> they pay it out to your bank account (versus an RA)
Ask the Saffers overseas how they are getting their RA's after emigrating...

Hmmm....Alexander Forbes in a bull market[2003 - 2012] in the high equity fund returned 2% per annum
after fees and before taxes
Outperforming that was not difficult over the next 8 years....
hell, I could literally have put it in bank account and outperformed (after taxes and after fees)

#noregrets


PS: You will always pay tax, question is it now or later

You’ll get at tax on it to the max which would negate every little bit of investment..

 

[SauRoNZA]

I topped my RA massively in end Feb. All that gains and tax perk is GONE, that is how much I lost. RA’s are poef, my 2c. (Then you might ask, why did I topup). Good question, money in the water....

You haven’t lost anything until you cash out.

 

[SauRoNZA]

Get it out how -> they pay it out to your bank account (versus an RA)
Ask the Saffers overseas how they are getting their RA's after emigrating...

Hmmm....Alexander Forbes in a bull market[2003 - 2012] in the high equity fund returned 2% per annum
after fees and before taxes
Outperforming that was not difficult over the next 8 years....
hell, I could literally have put it in bank account and outperformed (after taxes and after fees)

#noregrets


PS: You will always pay tax, question is it now or later

I haven’t heard of anyone having a problem with RA’s emigrating.

So one fund did terribly,there are many that did I similar, while others did well being 10% at times. Choose a better fund, don’t chose not to have a pension/RA.

Bank account doesn’t give you the same tax rebate benefits as using an RA.

 

[bchip]

I haven’t heard of anyone having a problem with RA’s emigrating.

So one fund did terribly,there are many that did I similar, while others did well being 10% at times. Choose a better fund, don’t chose not to have a pension/RA.

Not everyone has a choice of which fund to choose, often you dont get a choice.

Bank account doesn’t give you the same tax rebate benefits as using an RA.

So a fixed deposit gave 8% returns, 0 fees, -21000 interest exemption so a net return of 7% (after tax)
and the pension gave 3% before tax [in the BEST conditions] and your saying I shouldve stuck with the pension/RA because...

 

[SauRoNZA]

Not everyone has a choice of which fund to choose, often you dont get a choice.

Then what’s the point of the argument?

If it’s an RA you always get a choice because that would be a private option.

Pension/Provident you can’t choose but usually can decide how much you want to contribute and lower it all the way.

So a fixed deposit gave 8% returns, 0 fees, -21000 interest exemption so a net return of 7% (after tax)
and the pension gave 3% before tax and your saying I shouldve stuck with the pension/RA because...

View attachment 809589

The problem was a bad fund, not Pension/RA as a concept.

Mine has done 10% odd year on year last few years. Days gone by much more than that.

 

[bchip]

Then what’s the point of the argument?

If it’s an RA you always get a choice because that would be a private option.

Pension/Provident you can’t choose but usually can decide how much you want to contribute and lower it all the way.

You're arguements are jumping round and round...its hard to keep up with what your actually talking about.
Pension suck because after fees their returns are terrible and they are highly restrictive
These are most pension funds and being able to guess which ones will outperform is either moot
because you cant pick which fund or its a guessing game anyway.

RA's suck because they are even more restrictive to get out
It takes either a lot of fees and years to get your money out or a long time

Both are taxed as YOU pointed out which makes an even bigger hit to your returns, either now or later
In your 10% comment I take it you didnt take that into account.

The problem was a bad fund, not Pension/RA as a concept.

Pension/RA are a lesser of 2 evils. For most people they work.
It is still better to pay off your bonds.

Mine has done 10% odd year on year last few years. Days gone by much more than that.

You'll have to show me those returns. In the last 5 years STX40 went from 46 to 40 which is a -3% return per annum
If your pension fund has return around 10% per year in that time in a high equity
it means they are either transgressing their mandate or doing illegal stock moves.

In other words please provide more evidence, I am very curious how they did this.

 

[SauRoNZA]

You're arguements are jumping round and round...its hard to keep up with what your actually talking about.
Pension suck because after fees their returns are terrible and they are highly restrictive
These are most pension funds and being able to guess which ones will outperform is either moot
because you cant pick which fund or its a guessing game anyway.

RA's suck because they are even more restrictive to get out
It takes either a lot of fees and years to get your money out or a long time

Both are taxed as YOU pointed out which makes an even bigger hit to your returns, either now or later
In your 10% comment I take it you didnt take that into account.

Again if you chose the right respectable not money hungry cash grabbing dubs they shouldn’t cost anything to get out of (depending on that definition, I see it as switching from one fund to another as you shouldn’t ever be getting out of one otherwise).

You don’t have to guess anything, just do some research and generally not rely on others to do it for you with bullshit marketing advice.

Yes they are restrictive but this protects Joe Average so that’s fine. Sadly most companies especially choose asstastic funds based on financial advice that sucks.

Which is why an RA is far better than the whole lot as you get to choose.

Pension/RA are a lesser of 2 evils. For most people they work.
It is still better to pay off your bonds.

It’s best to do both. Maximise the tax return and put it back into your bond if you have the discipline for it.

My bond is basically my savings vehicle as it’s returns are better than almost anything and is tax free.

You'll have to show me those returns. In the last 5 years STX40 went from 46 to 40 which is a -3% return per annum
If your pension fund has return around 10% per year in that time in a high equity
it means they are either transgressing their mandate or doing illegal stock moves.

In other words please provide more evidence, I am very curious how they did this.

Not at all, there are a few that have performed well.

The very restrictive nature you complain about is what keeps them performing well, as they are all forced to be diversified and hence not just Top 40.

10X Investments

More money when it matters most

www.10x.co.za

Others from Sygnia do similar.

This year will obviously be different, but the applies to just anything.

 

[bchip]

The very restrictive nature you complain about is what keeps them performing well, as they are all forced to be diversified and hence not just Top 40.

This is rubbish....having worked on the portfolios of these companies I know what they all hold,
no-one is diversified. SA is not large enough to diversify and reg28 restricts it to local holdings.

Again if you chose the right respectable not money hungry cash grabbing dubs they shouldn’t cost anything to get out of (depending on that definition, I see it as switching from one fund to another as you shouldn’t ever be getting out of one otherwise).
...
This year will obviously be different, but the applies to just anything.

The 10% you talking about is after fees before taxes
and....more than a year and half old!
Ironic for someone that says:

just do some research and generally not rely on others to do it for you with bullshit marketing advice.

My Investment with 10x [as my company forces me to have] has been negative over a 5 year period.
I.e the real return is closer to the negative...not the advertisement

Growth my portfolio with them over 5 years:

 

[SauRoNZA]

This is rubbish....having worked on the portfolios of these companies I know what they all hold,
no-one is diversified. SA is not large enough to diversify and reg28 restricts it to local holdings.

Diversified within the scope of different types and industry.

But I recall there is allowance for some foreign investment, but not a majority for sure.

View attachment 809631

My Investment with 10x [as my company forces me to have] has been negative over a 5 year period.
I.e the real return is closer to the negative...not the advertisement

Growth my portfolio with them over 5 years:
View attachment 809633

Doesn’t make sense.

While mine hasn’t been stellar the last year or so it’s definitely not been negative and before that lines up perfectly with their performance claims.

Are you saying they are lying ? They would never get away with that.

 

[backstreetboy]

This is rubbish....having worked on the portfolios of these companies I know what they all hold,
no-one is diversified. SA is not large enough to diversify and reg28 restricts it to local holdings.

You can invest 30% overseas...

 

[bchip]

Doesn’t make sense.

While mine hasn’t been stellar the last year or so it’s definitely not been negative and before that lines up perfectly with their performance claims.

Are you saying they are lying ? They would never get away with that.

They are not lying, its just not the whole picture...

You take it from the lowest point to the highest point (and ignore the crash afterwards)
They made 11.1% after fees before taxes
The stock market made 10.3% after tax ...but before dividends

 

[bchip]

Doesn’t make sense.

While mine hasn’t been stellar the last year or so it’s definitely not been negative and before that lines up perfectly with their performance claims.

10x is very simple...the way they work is that they invest in index funds for you and take a smaller cut
than the rest of the industry. The rest of the industry is more active, with buy/sells and weightings.
10x just invests in passive etfs, so they dont need to hire financial analysts.

So they basically just invest in Stx40 and take a cut for it on a high equity fund.
the market did 13% (incl divs) in that time and they made 12% (before fees) / 11% after fees

 

[Gnarls]

PS: You will always pay tax, question is it now or later

I pick later cause then I can pay with inflated randelas.

 

[pinball wizard]

Buy some property in Lombardy. I bet you can pick up a deceased estate for cheap these days.

 

[SauRoNZA]

10x is very simple...the way they work is that they invest in index funds for you and take a smaller cut
than the rest of the industry. The rest of the industry is more active, with buy/sells and weightings.
10x just invests in passive etfs, so they dont need to hire financial analysts.

So they basically just invest in Stx40 and take a cut for it on a high equity fund.
the market did 13% (incl divs) in that time and they made 12% (before fees) / 11% after fees

View attachment 809677

I know exactly how it works, and no it’s not just a case of the Top40 like you make it out to be.

It’s broader than that and also individually weighted, which makes a huge difference. It also has international exposure and also property and bonds instead of all just in equity.

So basically it’s nothing like the Top 40.

Because it’s simple is why it works.

 

[bromster]

The ramifications of the covid-19 outbreak and Moody's downgrade have only just started to take their toll on the economy.

As foreign investors scramble to pull out, whilst government turns to China and possibly the IMF for funding to get through this mess, the scaffold which supports the whole economy becomes increasingly wobbly.

We are almost certainly not at the bottom of this mess. The true magnitude of this recession will only become truly evident a few months from now.

OP, if I had money to invest now, I would focus entirely on clearing as much of your debt as you can before interest rates become volatile.

 

[SauRoNZA]

They are not lying, its just not the whole picture...

You take it from the lowest point to the highest point (and ignore the crash afterwards)
They made 11.1% after fees before taxes
The stock market made 10.3% after tax ...but before dividends

View attachment 809665

But you said you have a negative growth.

Now you says they made 10.3% after tax.

Which I might add is 8.3% more than you earlier claimed your RA/Pension made for the past few years.

So are you lying to try make a false point? Or confusing yourself?