Author: Marleze van der Westhuizen

You have retired – WHAT HAPPENS NOW?

Posted on by Marleze van der Westhuizen

Retiring after devoting yourself to decades of demanding work can be both an exciting and daunting phase in your life. Here are a few things that may change when you are no longer working:

Budget, budget, budget – Instead of HAVING to do stuff you now have more free time to do things you really WANT to do – these may include hobbies, lunches, renovations and possibly holidays. So be realistic with your budget, plan carefully, so that your pension income does not fade away.

The truth about health expenses and underestimating life expectancy – Plan for longevity, as the reality is that people are starting to live well into their 80s. You need a well-set plan to cover medical aid or have enough saved up for medical care. This will bring you peace of mind on your road to a long and happy retirement.

Panic over existing investments – The Market will always rise and unfortunately fall. Avoid panic over your investments by speaking to your financial advisor on a regular basis, so that you understand the facts and know you are safe and that your investments are growing.

Beat the Boredom – Keep your retirement a positive and exciting experience. Create a routine and include activities which explore your passions. Become involved in your community and participate in charities. Elderly have a wealth of wisdom and life experience to impart, don’t underestimate yourself and your talents. Remember watching television can be part of your routine, but should by no means ever become the key focus of your day.

Finally enjoy the time to do things you have always wanted to do and Mondays may just become your favourite day of the week!

Sourced from:

https://www.usatoday.com/story/money/columnist/2013/12/02/retire-pension-financial-invest/3757971/

https://www.seniorliving.org/retirement/retirement-expectations/

Are you a Common-law spouse?

Posted on by Marleze van der Westhuizen

In a Nutshell…

TIP: Draw up a Will and nominate your partner in your pension fund using the nomination of beneficiary form, should you want any assets to be left to your partner in case of your death.

IF YOU SPLIT UP: A domestic partner, in the event of ending their common-law relationship, will not be entitled to their partner’s pension interest.

In South Africa no matter how long a couple may live together, the law does not recognise common-law marriages as being valid. Their cohabitation (living together) does not create any automatic legal rights and duties between them. The rights of a common-law spouse are not equal to a spouse registered in a legitimate marriage. In terms of the law of intestate succession, if there is no will and one partner in a common-law marriage dies, the common-law spouse will have no rights on the property or assets left behind. Therefore it is important to get a will drafted to make provision for your partner.

Although common-law marriages do not have the same rights as partners in a marriage or civil union, there is some legislation that does consider living together and marriage on equal levels. Please do your homework.

Regarding pension funds, cohabitation is recognized and a common-law spouse may receive pension fund benefits if nominated by the member as a partner. A common-law spouse who qualifies under the definition of a dependant within the rules of that fund, may also receive pension benefits.

The technical definition: – A common-law spouse is a partner in a recognized marriage without being formally recorded with a state or a religious registry, but rather by habit and repute.

Why set up a Will and why details really do matter!

Posted on by Marleze van der Westhuizen

If you die today, have you taken care of what you leave behind? A Will allows for you to make decisions in case the worst happens and while alive you hold the power to decide who will take care of your children, and what property and money goes to whom. Without this document, the government holds the power to make these personal decisions on your behalf.

Here are essential tips in drawing up a good Will:

  • Keep it simple and practical.
  • Update your records – Make sure your employer and retirement fund have your updated list of beneficiaries (CRF members only) as well as a list of those who depend on you.
  • Get expert advice – Use a financial advisor as it is not wise to draw up your own Will unless you are an expert in this field. Understand that getting a will drawn up will require money, however in the long term it is an investment for your loved ones.
  • The cost of getting a Will drawn up need not be expensive – but is always worth it! The cost may vary according to who is appointed as your executor. If unsure ask your Financial Advisor or Banking Institution.
  • Understand the consequences within your Will. We all know families who are going through strife after a loved one dies where the Will created contention.
  • Appoint an executor in your Will. The executor will own the responsibility of taking control of all assets, liabilities, as well as distributing assets according to your Will. Otherwise your loved ones are left having to do this while they are grieving. The process in some cases can take years.
  • Nominate a trusted guardian should you have any children of your own and consider creating a trust for them so that their money can be managed by a neutral party who cannot be manipulated.
  • Check what the term of your marriage contract dictates and make sure you understand what tax needs to be paid.
  • Take care of your obligations, such as maintenance in a divorce order.
  • And lastly, watch your language! There is a world of difference in stating, “I leave my Audi to my daughter” compared to “I leave an Audi to my daughter”.

Planning for your own loss is not the top of everyone’s bucket list; however it will be one of the most important documents you will ever sign and in doing so will create financial peace of mind for your loved ones you leave behind.

Seven retirement planning mistakes to avoid.

Posted on by Marleze van der Westhuizen

Seven retirement planning mistakes to avoid so that your golden years don’t carry the stress of work.

For our members, retirement can be a daunting process, so here are a few retirement pitfalls to avoid.

  1. Not having a plan:

Fortune magazine published a study showing that people with written plans ended up with more than five times the amount of money compared to those with no written plans.

  • Calculate your monthly expenses.
  • Is it practical to retire now?
  • Can you afford to retire?
  • Can you downscale your costs?
  • Will you be able to save?
  • Have you considered future medical expenses?
  • And lastly, do you have a trusted financial advisor?

 

  1. Cashing your out retirement fund too early:

Avoid cashing out your hard-earned money too soon. First go over your plan (or make one if one is not yet created), and talk to your financial advisor.

“You’re either saving for retirement today, or you’re consuming your retirement today.”

  1. Retiring without your first few months income set aside:

No one’s retirement or pension check is paid out immediately and therefore it is important to have funds set aside to support you during this waiting period.

 

  1. Not saving enough and underestimating health care costs:

Health care costs, short term or long term will be most retirees largest expense; in the unfortunate case of this happening, consider keeping an emergency fund for these possible expenses.

 

  1. Not listening to advice from professionals:

Financial advisors are professionals available to help you plan for retirement, advise you on where to invest, and can help create a financial map to help guide you through your retirement years. One would need to do a lot of research if you are the DIY type and most people do not have the time or maybe the necessary skills to make these type of investment decisions. Please always consult a professional financial advisor to help with this.

 

You always need to have a well-diversified portfolio, but this becomes ever more important the closer you get to retirement.

 

Financial advice is always important, but it is critical that you start to consider aligning the asset allocation of your pre-retirement portfolio to mirror the investment portfolio you will need after retirement. This is where you will need professional financial advice.

 

Most of us will live for 20 to 30 years after retirement; so take the time to plan and listen to advice from professionals so that your retirement can feel like a well-deserved extended holiday away from the stress of work.