Fernco Financial Services

05/06/2024

If the past few years learned us anything, it is that savings, will save you!

When it comes to saving for a rainy day, South Africans are world wide known for not saving enough for unforeseen circumstances. Even those who do save, must navigate the pitfalls and make sure they do not pay unnecessary fees and money to the SARS. When it comes to saving for retirement, your inves...

24/05/2024

Focusing on saving for retirement.

Saving for retirement is financially to most difficult journey you would ever go on. If you started early, it is easier because you made yourself used to not having that money available in your life. A bold statement, but in my experience the absolute truth. If you want to retire with a measure of i...

16/05/2024

Focusing on retirement planning. Follow up article on post retirement products.

A Guaranteed annuity is a retirement product you buy post retirement with money you have saved up in your pension/preservation fund or retirement annuity fund. It is an insurance product and in no way linked to the financial markets. The best way to describe the product is to say you buy an income s...

08/05/2024

Retirement: What is a living annuity?

A living annuity is a financial product you buy post retirement with the saved up money you have in your retirement annuity/pension fund.

A living annuity is an investment product and you are exposed to market risk. You can change the rate of withdrawal out of the policy between 2.5% and 17.5% per year, and you can choose to receive the income monthly, quarterly, half yearly or yearly. You cannot make lumpsum withdrawals out of the policy. You can nominate a beneficiary on the policy and this person will receive the fund value at the time of your death. This fund value will depend on your withdrawals and market growth you had on the policy.

The benefit of this type of policy is that you can bequeath capital to a family member, but you carry the risk that you might outlive your capital. You also need a large sum of money to invest in order to keep your withdrawal rate low and preserve capital to outperform inflation. In an ideal world, you would want to be able to have a guaranteed annuity and a living annuity. In order to be able to do that, you would have to save for many years consistently. In order to manage the risk of outliving your capital, a guaranteed annuity is the ideal solution and that will be dealt with in another post.

Start early with retirement saving and prioritize it in your budget. Do not stop your contributions unless you have absolutely no other choice.

24/03/2022

The SARB monetary committee increased interest rates by 25 basis points.

04/01/2022

On 15 November I posted the JSE All Share index broke 70 000 points.

Just now, less than 2 months later we are at another all time high of 75 000 points!

What a time to be an investor in SA.

15/11/2021

For the first time ever, the JSE All share index now trades above 70 000 points!

31/05/2021

Work from home office sign up and running. Here is to all out there builing a small business dream!

31/05/2021

New perspex sign for outside. A business with no sign, is a sign of no business.