Wealth and provision help

[Random Hero]

Hi All,

Have always gotten only the best advise here. From career growth to relationship help.

So I am 29, and I am not making provision or have any annuities in place.
For previous companies that I worked for, we had pension funds but I pulled them out after resigning.

The company I work for has no benefits or pension provision.

I am looking at getting an annuity or some provident fund from Allen Grey or something. But super ignorant and have this irrational fear that you will get screwed over with these things when you don't know how things work.

The other problem is I am getting older and for some reason feel that I am too late to have enough to last me when I'm old.

Any help on where to start and what to look at would be awesome.

 

[SauRoNZA]

Yeah having pulled out your pensions wasn’t too bright and then starting fresh at 29 is a hard road ahead for you I’m afraid of either struggling at retirement or putting a lot more away than you planned to.

I can’t recommend 10x enough and in your case the full 27.5% would do you well if even just for a few years to get things kick started.

It’s a shame that so many people are so fearful of “getting screwed over” that they in turn put nothing at all away and screw themselves over.

Even the worst investment options would still have put you in a much better position than having no savings at all.

 

[Random Hero]

Yeah having pulled out your pensions wasn’t too bright and then starting fresh at 29 is a hard road ahead for you I’m afraid of either struggling at retirement or putting a lot more away than you planned to.

I can’t recommend 10x enough and in your case the full 27.5% would do you well if even just for a few years to get things kick started.

It’s a shame that so many people are so fearful of “getting screwed over” that they in turn put nothing at all away and screw themselves over.

Even the worst investment options would still have put you in a much better position than having no savings at all.

Hi Sauron,

I know quite disappointing only started working when I was 23 too.

Any advise?

 

[Random Hero]

I should mention that I have saved R115 000. which is in my bank about and no debt. So I would probably put most of that in the account account.

 

[AdrianH]

Hi Sauron,

I know quite disappointing only started working when I was 23 too.

Any advise?

Hi Sauron,

I know quite disappointing only started working when I was 23 too.

Any advise?

You won't get screwed over. You are still young enough to start saving, well done for realizing you need to do something. I agree with 10x. Phone them and just get something going. You could always increase premiums later on or even take out another at a different institution if you like.

Later on in life you could also look at other investments like property with the plan to pay it off as quickly as possible. You would do well have investments/savings in different areas.

 

[AdrianH]

I should mention that I have saved R115 000. which is in my bank about and no debt. So I would probably put most of that in the account account.

I would not put any of that into RA. Either buy property and use it for deposit, or put it into some medium risk investment account. Leaving it in your bank account is slightly better than leaving it under your mattress, but it's still crap.

Also, ask @SauRoNZA about tax free savings, might be a good option as well, but I don't know enough about them to say much.

 

[SauRoNZA]

Hi Sauron,

I know quite disappointing only started working when I was 23 too.

Any advise?

Start as soon as you can and stick to it.

Make the money disappear on a debit order so you forget it exists.

27.5% of 90% of your gross salary is tax deductible so that means you get a massive chunk back every year come tax time.

If you are that disciplined take half of that tax return money as a bonus and stick the other half into a tax free investment account of some sort.

Drop me a PM with your full name, cell number and email and I’ll drop you a 10x referral. Will score us both a R250 takealot vouched but more importantly you’ll get six months without fees which will be great as you can start with your lump sum.

Their fees are very transparent unlike everyone else.

The sooner you start, the better.

 

[SauRoNZA]

I would not put any of that into RA. Either buy property and use it for deposit, or put it into some medium risk investment account. Leaving it in your bank account is slightly better than leaving it under your mattress, but it's still crap.

Also, ask @SauRoNZA about tax free savings, might be a good option as well, but I don't know enough about them to say much.

If I had no retirement to speak of I would most definitely dump all of it into my RA to kickstart the compound interest running and benefit from their sooner.

Without it to start things up you’ll be looking at many many years before that RA starts to matter.

 

[Daisy Cloudskitter]

I am looking at getting an annuity or some provident fund from Allen Grey or something

f I had no retirement to speak of I would most definitely dump all of it into my RA to kickstart the compound interest running and benefit from their sooner.

Without it to start things up you’ll be looking at many many years before that RA starts to matter.

^^ This + 1 , - some basics you might find useful here :
Low fees and superior returns mean more money for you at retirement.
10x :
https://www.10x.co.za

How to Save for a Comfortable Retirement in 11 Simple Steps :
Allan Gray :
https://www.allangray.co.za/Learn-h...Vh7PtCh1qCwB1EAAYASAAEgI9p_D_BwE&gclsrc=aw.ds

Weighing in on tax-free savings accounts and retirement annuities

Fin24 article :
https://www.fin24.com/Money/Money-C...gs-accounts-and-retirement-annuities-20180508

It is not too late to buy a retirement annuity. You do not have to "retire" from a retirement annuity investment when you retire from your employment. You can retire from a retirement annuity investment at any age.

You can get a tax deduction from your income in respect of your contributions to a retirement annuity of the lesser of R350 000 or 27.5% of (the higher of) your remuneration or taxable income per year. Remuneration and taxable income have different definitions in the Income Tax Act.

The growth (interest, dividends) in the retirement annuity is not subject to tax. You can stop contributing to the retirement annuity at any time and leave it to grow.

 

[Tman*]

I would not put any of that into RA. Either buy property and use it for deposit

Some good advice here.

Ask yourself how many people you know that have retired comfortably with a pension or RA? I know none.

Do the smart thing and start saving, just dont expect a RA or a pension fund to be this magical pill to solve all your old day problems, cuz it's not.

 

[SauRoNZA]

Some good advice here.

Ask yourself how many people you know that have retired comfortably with a pension or RA? I know none.

Do the smart thing and start saving, just dont expect a RA or a pension fund to be this magical pill to solve all your old day problems, cuz it's not.

The RA is just a vehicle.

Not saving enough is a simple personal failure.

The Pension or RA is not the fault of those vehicles for not being enough at retirement, it’s a case of people starting too late and/or saving too little.

Also, I know plenty of people who have retired happily with pensions or RA’s.

I know way more who haven’t retired at all because they have nothing at all and can’t if they wanted to.

Property can be a bottomless pit. Especially if you are barely making the payments and paying the bank back at exactly the term they set for you at the high interest level they decided on to make THEM money, then it’s not necessarily the investment it seems.

 

[wcm]

RA funds offer average returns at best later on and aren't even guaranteed to give you what you invested back at that stage, invest elsewhere and save as well. Don't think RA will be this magic fund waiting for you once you ready to retire and solve all your finances.The only people who make their money off RA are the entities offering it.

 

[diapason]

27.5% of 90% of your gross salary is tax deductible so that means you get a massive chunk back every year come tax time.

27.5% of total taxable income is tax deductible to a mamimum of R350k pa. Also if proof of the annuity payments is provided to the employer, he can arrange for the tax adjustment to happen on a monthly basis

 

[jman]

I'd do the full yearly allocation (33k) to a TFSA with easyequities, in a global index fund like Satrix world. Thereafter, you can't go wrong with an RA with 10x, Sygnia or Nedgroup. So throw the rest into there, and put 27,5% in there going forward. I wouldn't go into property - highly concentrated risk in SA and property, which has done terribly of late.

Anyways, check out stealthywealth.co.za to educate yourself

 

[diapason]

RA funds offer average returns at best later on and aren't even guaranteed to give you what you invested back at that stage, invest elsewhere and save as well. Don't think RA will be this magic fund waiting for you once you ready to retire and solve all your finances.The only people who make their money off RA are the entities offering it.

The returns of modern RA funds depends on where they are invested - like unit trust investments. The only difference is that retirement funds are subject to Regulation 28 which puts certain limitations on your investments - you cannot be invested 100% in equities.

 

[diapason]

I should mention that I have saved R115 000. which is in my bank about and no debt. So I would probably put most of that in the account account.

Just bear in mind, before tying that up, that you should always have several months' worth of expenses set aside for emergencies, eg major car repairs, medical expenses, and the biggie - retrenchment.

 

[Arzy]

As an alternative view I'd look at opening a USD account through your bank, most offer it, and investing in one of the Vanguard tracker funds.

 

[backstreetboy]

https://www.sygnia.co.za/roboadvisor/sygnia-roboadvisor

 

[diapason]

It is not too late to buy a retirement annuity. You do not have to "retire" from a retirement annuity investment when you retire from your employment. You can retire from a retirement annuity investment at any age.

For this reason, there is lot to be said for having more than one RA. At the time of retirement, you may not need to access the full amount, but may prefer to have a "spare" annuity which you can leave to grow until a much later age, even if at that stage you are no longer contributing to it.

 

[backstreetboy]

For this reason, there is lot to be said for having more than one RA. At the time of retirement, you may not need to access the full amount, but may prefer to have a "spare" annuity which you can leave to grow until a much later age, even if at that stage you are no longer contributing to it.

Pointless unless you love paying more fees etc. They call it a living annuity anyway.