The Wealth Perspective - Fourth Quarter 2024

Welcome to the latest edition of The Wealth Perspective

The year is drawing to a close, and much has changed over the past 12 months. 2024 was a year in which nations representing almost half of the global population headed to the polls – including in South Africa and, more recently, in the United States.

There were also meaningful developments in the financial services industry this year – notably, the introduction of the two-pot retirement system on 1 September 2024, which has had significant implications for retirement planning. One of the more material changes brought about by these legislative changes is that members of retirement funds now have greater access to their savings before they retire.

 

Solid foundations

When the sands are shifting, the importance of solid foundations become even more crucial. This is certainly true of retirement planning, and this quarter’s edition focuses on saving for retirement and the importance of a solid yet flexible plan.

Making an early start to your savings journey and maximising the benefits of compound interest are fundamental strategies that underpin a robust retirement plan. Contributing a portion of windfall amounts such as bonuses or making small increases to contribution rates can also make a substantial difference over the long term and facilitate greater financial freedom in later life.

 

A long-term mindset

Planning for a comfortable retirement requires a long-term approach. Each individual’s needs will change as they progress along this journey, and plans need to be holistic and flexible enough to accommodate this. Revisiting plans at regular intervals – especially when entering a different stage of life – is an important part of a successful plan. Choosing suitable products for achieving investment goals is another factor to consider.

 

Planning ahead

As the festive season approaches, it is easy to get caught up in excess and overspending, but getting into a disciplined habit of saving is just one powerful way to secure a more comfortable financial future. With only a few months left before the end of the tax year, I encourage you to take advantage of the tax benefits available to you by investing in tax-efficient products and saving what you can.

I hope you enjoy the festive season and enjoy the read.

 

PSG Wealth’s cut-off times for contributions in the current tax year

Please take note of the cut-off times for contributions to PSG Wealth Retirement Annuity (RA) and PSG Wealth Tax Free Investment Plan (TFIP) investments that need to be met to ensure these instructions are processed for inclusion in the current tax year, ending on 28 February 2025. Missing these cut-off dates means that instructions will only be processed for inclusion in the following tax year.

Payment method	Cut-off dates
Electronic   collections*	Instructions must be received by Wednesday, 26 February 2025.
Electronic fund   transfers	Funds need to reflect by Friday, 28 February 2025. We recommend making payments   48 to 72 hours prior to this date.

* Note that the tax date applicable to recurring electronic collections will be the intended electronic collection date, regardless of whether the intended collection date is a business day or not.

A word from our CIO - Adriaan Pask, Chief Investment Officer, PSG Wealth - Maximising retirement benefits at different ages

Industry views - Thomas Berry, Head of Sales, PSG Wealth - The effect of legislative changes on retirement planning

Investing and trading - Wendy Myers, Head of Securities, PSG Wealth - The role of a securities portfolio in your holistic retirement plan

Estate matters - Gerhardt Meyer, Senior Legal Specialist: Advice, PSG Wealth - The impact of retirement planning on one’s estate and beneficiaries

Product insights - Linda Kleynscheldt: Head of Actuarial and Product, PSG Wealth - Choosing the right investment products to meet your retirement planning needs

Financial planning - Robyn Laubscher, Advice and Product Specialist, PSG Wealth - Retirement planning through different life stages

Frequently Asked Questions

What is the two-pot retirement system, and how does it impact my retirement savings?

The two-pot system, introduced on 1 September 2024, allows members of retirement funds to access a portion of their savings before retirement. This provides greater flexibility but requires careful planning to avoid negatively impacting long-term savings.

 

Why is starting early with savings important?

Starting early enables you to take advantage of compound interest, which significantly boosts your savings over time. Even small contributions, such as bonuses or incremental increases to your monthly savings, can have a big impact over the years.

 

What are the cut-off dates for contributing to PSG Wealth’s tax-efficient products?

• Electronic collections: Instructions must be received by Wednesday, 26 February 2025.
• Electronic fund transfers: Funds must reflect by Friday, 28 February 2025. Ensure payments are made 48 to 72 hours prior to this date for timely processing.

 

How often should I revisit my retirement plan?

Revisit your plan regularly, especially during life transitions like a career change, marriage, or approaching retirement. This ensures your plan remains aligned with your goals and adjusts to legislative or personal changes.

 

What should I consider when choosing retirement products?

Focus on products that match your investment goals, risk tolerance, and life stage. Seek advice from a financial planner to choose options that integrate tax efficiency and flexibility.

 

How does retirement planning impact my estate and beneficiaries?

Your retirement plan can influence your estate planning. Ensuring that your beneficiaries are up-to-date and understanding how retirement funds are distributed is key to effective estate management.

 

Can I include a securities portfolio in my retirement plan?

Yes, a securities portfolio can complement your retirement plan by diversifying your investments and potentially increasing returns. However, this should align with your risk profile and long-term goals.

 

Where can I get more advice on retirement planning?

PSG Wealth offers expert guidance through its financial advisors and specialists. Explore topics like legislative impacts, product selection, and planning strategies to maximise your retirement benefits at any life stage.

For further assistance, contact a PSG Wealth advisor today!