FC Wealth Viewpoint | Apr 2023

DEAR CLIENT

Welcome to our April 2023 edition of FC Viewpoint.

IN THE NEWS:

• The?JSE All Share Index were 4.4% higher?from 75 502 on 13 March 2023 to 78 797 on Wednesday 19 April 2023.
• Annual consumer price Inflation edged higher to 7.1%.
• ?The prime lending rate in SA increased by another 50 basis points to 11.25% per annum.
• The price of?Oil is $80 per barrel.
• The?US year-on-year CPI number?eased last month to?5%, the lowest level since May 2021
• ?The fifth SA Investment Conference (SAIC) saw the five-year objective of R1.2 trillion in private sector fixed investment in South Africa exceeded, with the investment commitments reaching a reported?R1.51 trillion?for the five-year period.
• One Google search uses the same amount of computing power it took to send the Apollo 11 astronauts to the Moon.
• Every 5 years, average?life expectancy increases?by roughly?1 year.

THIS MONTH’S TOPIC: THE CHANGES TO THE RETIREMENT FUND LUMP SUM TAX TABLES

To account for the impact of inflation, this year’s National Budget introduced changes to the retirement fund lump sum tax tables for retirement fund cash lump sums taken both before and at retirement.

From 1 March 2023, the?tax-free amount?that can be taken as a lump sum payout from a retirement fund?increased?by 10%, from R25 000 to?R27 500 before retirement, and from R500 000?to R550 000?at retirement.

THE RULES REGARDING WITHDRAWALS

• ?You are able to take a once-off withdrawal from your pension or provident fund if you leave your employer, or from a??preservation fund before retirement.
• You may also withdraw from a retirement annuity and preservation fund in certain circumstances, such as leaving the country and ceasing to be a South African tax resident for an uninterrupted period of at least three years from 1 March 2021.
• You may also access a cash lump sum from your retirement fund when you retire, and your beneficiaries may choose to access cash from your retirement savings on your death.
• This tax-free amount is a?“once-in-a-lifetime”?or cumulative benefit, irrespective of the number of retirement funds to which a taxpayer belongs, and is reduced by any taxable lump sums received previously.
• Severance benefits are also included in the calculation of the lifetime benefit amount for tax purposes.

It is important to understand the access you have to your retirement fund savings, as well as the calculations used, so that you do not run into an unexpected tax bill.

SLIDE OF THE MONTH: JSE ALL SHARE INDEX

The following chart compares the performance of the JSE in 2022 with the current performance year to date in 2023:

QUOTE OF THE MONTH

Saving is a healthy habit that you can develop over time with a bit of effort, discipline and commitment, that will lead to abundance in the future. Spend wisely, keep investing and saving and stay positive.

Wealth regards,

Fanie Jansen Van Vuuren?CA (SA), CFP?

Director:?FC Wealth and Investments (Pty) Ltd

E:?[email protected]?|??T:?083 384 5868

W:?www.fcfin.co.za