THIS MONTH’S TOPIC: Two-pot retirement system
FC Financial Group
FULL CIRCLE FINANCIAL SOLUTIONS Your financial comfort is our mission.
Welcome to our July 2024 edition of FC Viewpoint.
IN THE NEWS:
The JSE All Share Index is on 81 319 as of Thursday 12 July 2024. This is 5.6% higher than last month.
1 US Dollar will cost you R17.98; 1 Pound = R23.21 and 1 Euro = R19.53.
Annual consumer inflation (CPI) is at 5.2%.
The prime lending rate in SA is 11.75% per annum.
The price of Oil is $83 per barrel.
Two-pot retirement system
Why is government implementing the two-pot system?
-? To encourage pre-retirement preservation and prevent members from accessing their retirement fund benefits when they leave employment.
-? To give retirement fund members access to a part of their retirement fund benefits in case of emergencies or financial hardship.
How the current system works:
Two-pot System – 3 Components
TO CONCLUDE
Even though the two-pot system might seem to offer you a cashflow solution in the short-term, the long-term implications are far-reaching. For every withdrawal, there will be tax implications. Once you reach retirement, SARS will take into consideration what you have withdrawn from your retirement funds throughout your life and add it to your retirement withdrawal. Your total sum will be taxed at the current retirement rate. You will also be left with less money to retire with.
We would like to encourage you to preserve your retirement funds for as long as possible and if you need to discuss or adjust your retirement goals, please feel free to contact us or set up a meeting.
Wealth regards,
Fanie Jansen Van Vuuren CA (SA), CFP?
Director:?FC Wealth and Investments (Pty) Ltd