Get tax savvy before February 2019

We all feel that we pay too much tax. Luckily there are clever ways to use tax breaks to your advantage, and the best thing is that it’s legal. You can maximise your tax benefits before 28 February 2019.

Einstein didn’t refer to compound interest as being the eighth wonder of the world for nothing. He said:

He who understands compound interest, earns it, he who doesn’t … pays it. It is the most powerful force in the universe.

Top up your retirement fund

You can make a pre-tax contribution to your retirement fund every year. A pre-tax contribution means you are allowed to contribute up to 27,5% of the higher of your taxable income or salary before any deductions are made, capped at R350 000 per year.

  • When you re-invest this money that you saved on tax, the total value of your investment increases, and so does the compound growth that you earn on it.
  • If you have not yet maximised the 27,5% benefit with your regular contributions, add a lump sum to your retirement annuity (RA) or pension fund before 28 February 2019.

Go tax free with a tax-free investment

You are also allowed by the government to invest R33 000 per year (up to a maximum of R500 000 during your lifetime) of after-tax money in a tax free investment (TFI) account.

  • This allows you to enjoy growth that is free of dividends tax and tax on interest, and you pay no capital gains tax on money that you withdraw.
  • Your investment is not taxed, so you’ll have a larger balance that is growing tax free, for as long as you remain invested.

Speak to your financial adviser now and maximise your tax benefits for the tax year before 28 February 2019.

If you don’t have an adviser and would like to speak to one, click here

Goodbye retirement, hello rewirement

I will never be an old man. To me, old age is always 15 years older than I am. – Francis Bacon

In years gone by, people used to work, regardless of their age, until they no longer physically could. In 1916 the German authorities decided that 65 would be the age when Government retirement benefits would kick in for its citizens, according to Other countries soon followed in Germany’s footsteps and the retirement age of 65 has been contested ever since.

The problem today is that governments can’t sustain their growing ageing populations with pension payouts for so long. The ability to grow older and live longer also means that most people will need a lot more money to cover their retirement and medical costs. Today, many countries are gradually increasing their retirement age. Dutch citizens retire at 68 and Denmark is aiming for a retirement age of 72 by the year 2035.

Sixty-five is no longer viewed as the onset of old age but rather the start of middle age. Depending on your health, you might consider to postpone your retirement or to view it, not as a slowing down, but as an opportunity to “rewire” yourself. Working longer means more time to save and grow your retirement investments and reap the benefits of compound interest. Ironically, studies also show that people who work longer, live longer and healthier lives.

The future of retirement is rewirement

How can you rewire yourself during retirement? Rosabeth Kanter, professor of business at Harvard Business School, says the first step is to eliminate the term “retirement” by inventing a new stage of life: the new career arc. Many also refer to this as the second career. Here are some examples:

The future of retirement is rewirement
  • Work for your company on a contract basis.
  • Become a consultant in your field.
  • Train and mentor workers. Experience never gets old.
  • Retired teachers can offer learners extra classes. Many professors continue teaching or accompany students on field trips because they have so much knowledge to share.
  • Work part time and from home, for example a language practitioner can edit texts and a tax consultant can still help people submit their returns.
  • Turn your hobby into a business. Sell your homemade goat’s milk cheese at the Neighbourgoods Market or teach children art classes.
Volunteer your time and skills:
  • Work at a soup kitchen or feeding scheme.
  • Organisations like the SPCA require dog walking volunteers and people who can play with the animals at their shelters.
  • Teach kids and adults how to grow their own vegetables organically.
  • Become a tour guide.
  • Start an adult literacy programme or become involved with a reading project.
Don’t let boredom get the better of you:
  • Learn a new language. Parles vous Français? Doing this at 60 years or above slows down mental ageing.
  • Take a class and learn something new: Karate or art lessons, anyone?
  • Go back to the books. Enrol at university or do an online course. Have you always dreamt of getting a degree in philosophy or applied mathematics, or how about completing a course in eco-management and sustainable living?
  • You’ve always wanted to write that novel. Or research your family history.
  • You are going to live to be hundred, right? It’s never too late to learn how to become an award-winning photographer or Pinterest boffin.

Age is but a number and you are only as old as you heart feels. Perhaps we should follow in the Japanese tradition where a person’s sixtieth birthday, Kanreki, is viewed as an important rebirth. This rebirth signifies the completion of a life cycle. It is a celebratory and symbolic return to childhood that encourages you to play and explore. The person who reaches Kanreki, rekindles his or her adventurous spirit and grabs the second chance to do everything he or she has always wanted to do but never had the time for. What are you waiting for?


Updating your list of beneficiaries, and why you should care

A beneficiary is a person that you nominate to receive all or a percentage of the money from your policies, certain investments and retirement funds such as your retirement annuity and preservation fund when you pass away. You can nominate one person or more than one, and choose the percentage you want every beneficiary to get.

But why should you nominate someone if dependants get preference?

The Pension Funds Act says that the trustees of a retirement fund must decide how the money will be paid out when you die, and who must receive it. The trustees have to identify the dependants and nominees and then decide what will be the most fair and reasonable way to divide the money among them.

A dependant is any person that was legally or financially dependent on you at the time of your death. There are also dependants that you would have had to look after in future, such as an unborn child or elderly parent. Dependants get preference above nominees, but the trustees will use your list of beneficiaries as an invaluable guide to determine both dependants and beneficiaries.

Three more good reasons to nominate are the following:

  • As your pension money falls outside of your will, your list of nominated beneficiaries will take preference as far as your pension money is concerned, regardless of other provisions in your will.

  • Your family may get the money quicker, because some estates can take a long time to wind up.

  • An executor’s fee is generally paid based on a percentage of your estate, and by excluding pension money, which can add up to quite a substantial amount, the executor’s fee will be lower if beneficiaries are inheriting this money.

Beneficiary Who?

Can you remember who you listed as the beneficiary for every financial product that you own?

Our life circumstances continuously change: through marriage and divorce, the addition or loss of dependants, for example a baby is born or you lose a parent, or the number of people who are financially dependent on you.

Keep tabs by keeping a list of the beneficiaries that you have nominated for different products, as well as the percentage that you allocated to each beneficiary. Also contact the different institutions and update your list of beneficiaries if your circumstances change. It is good to do this yearly so that you do not forget.

How to update your list of beneficiaries

  • Speak to your financial adviser if you want to find out who your beneficiaries are or update your listed beneficiaries.
  • Can’t remember who you nominated as beneficiaries or want to update your beneficiaries? Click here and log in to your profile.
  • Not yet registered? Click here to create a login profile.
  • Alternatively, to update your beneficiaries, download and save the form. The form is fillable electronically, but you have to print it to sign it on the last page. Then scan and send your form to Use your policy number as reference in the subject line of your email. You will get a response from us within five working days. Click here to download the form.

Enjoy peace of mind knowing that your loved ones who need it most will receive your money if something happens to you.