Saving For Retirement
Your retirement should be the beginning of a relaxing and rewarding phase of your life
. With adequate funds in place, you can look forward to a stress-free life of leisure when you finish your working career.
It is never too early to start investing in your future. In fact, most financial advisors would advise that you start saving for your retirement on receipt of your first pay cheque! A timely retirement savings plan will ensure that sufficient funds will be available to you in your golden years.
If you havent already started planning for your retirement, contact an authorised financial services provider for advice on choosing the optimal investment plan for your retirement. There are a number of different savings, investment and insurance solutions available.
Have you considered a provident fund?
A provident fund is a savings account comprised of the contributions made by you during your working years, in addition to the equal contributions made by your employers. The monthly contribution is calculated as a percentage of your salary and paid out to you on retirement.
On retirement, the total value of your provident savings can be paid out in cash. Chat to your broker to establish the applicable tax conditions at the time of your withdrawal. Alternatively, you can select to convert all or part of your accumulated capital to purchase an annuity from an insurer of your choice.
The funds used to purchase the annuity are transferred tax-free, but the payments made thereafter will be subject to the prevailing PAYE and SITE conditions at the time of payment.
Pension fund features and benefits
A pension fund is an investment asset pool established by an employer. You, the employee and your employer will contribute to this account to generate long-term stable growth. These accrued funds will provide you with a pension once you reach retirement age.
When you retire, a lump sum of up to one third of your pension value is payable to you. Thereafter it is compulsory to purchase an annuity with the balance of the funds. The lump sum paid out to you will be affected by the tax conditions applicable at the time of payment. As with a provident fund, the annuity purchase will be transferred tax-free.
Your provident or pension fund is the single largest amount of capital you will ever accrue. These insured funds are invested in a secure, tax-efficient savings account, safe-guarding your retirement nest egg.
Conditions and benefits of preservation funds
It is not permissible to withdraw any cash from your preservation funds before your retirement.
In the event of your death before retirement age, your investment funds will be paid out in full to your nominated beneficiaries, less any applicable tax deductions.
You are permitted to switch between investment portfolios.
If you are disabled before the minimum retirement age, it will be compulsory for you to submit medical evidence of your disability to specified parties. On acceptance, you will be considered as an ill-health retiree.
You are permitted to transfer your capital to another registered preservation fund before retirement.
Retirement annuity
A pension or provident fund is a long-term means of saving funds for your retirement. A retirement annuity serves to ensure that you will not outlive your assets. These insurance plans provide a lifetime income stream from your pension savings that cannot be outlived.
Retirement annuity (RA) investors are not subject to any annual contribution limits and they may invest as much or as little as they wish. There is no pre-determined age for withdrawal and investors are at liberty to postpone the payments until they are needed.
Features and benefits of a retirement annuity
There is no medical examination required for retirement annuity qualification.
An annuity plan provides reliable financial protection and your funds will be secure in the case of insolvency.
Retirement annuities do not have to be spent, they can also be saved. If you invest in an RA, your funds are tax sheltered until they are withdrawn.
Annuity plans can be fixed or subject to fluctuating inflation conditions.
In the event of your death, one third of the funds are paid out immediately to each appointed beneficiary. The balance is used to acquire an annuity for each beneficiary and dependent, ensuring that they will each receive an income.
Success in retirement takes foresight and sufficient saving
Maintain your independence and experience financial freedom in your later years, by saving for your retirement. There are many retirement funds available to you in South Africa. Seek professional advice from an insurance provider, to secure your financial future.
by: AlterSage
Do You Really Want Fixed Income Investing? Investing Basics ' What Are Your Investment Goals Questions to ask when interviewing a Personal Claims Lawyer San Diego Big Trouble Ahead For Many 419 Welfare Benefit Plan and 412i Retirement Plan Participants How To Find Good Accident Lawyers Construction Accident Lawyers Ny Recover The Loss Important Things Before Going For Retirement And Financial Planning New York Lawyers The Right Investment For Your Retirement Value Investing Versus Growth Investing Points to Consider When Investing Seattle Accident Attorney - Should I Hire a Lawyer? Information In Regards To Early Retirement Questions And Its Potential Problems