I’m 42 years old and self employed and I would like to have a retirement vehicle. Monthly I earn around R10 000 after my expenses and I would like to invest this money for retirement. Do you have any suggestion?
As a self-employed client, the most suitable retirement vehicle could be a retirement annuity. This is a tax efficient vehicle for investors who wish to enjoy a certain standard of living when they are no longer employed. Contributions to a retirement annuity could either be in the form of a lump sum amount or monthly contributions.
We generally advise our clients to carefully consider their retirement goals and make financial contributions that will help them meet those goals. It is important to always consider your financial circumstances as an individual and to ensure the contribution is always affordable and in line with your goals.
As a business owner, it is even more important to consider self-funding of your retirement savings due to the fact that you may not be contributing to a company pension fund.
You probably see your business as part of your retirement plan in the sense that you can sell it at some stage to unlock your wealth. This is not always an easy option and very often, business transfers are complicated. The future value, provided you find a willing and able buyer, is not certain.
Over and above simply considering retirement savings, we would suggest that you also consider succession planning and the impact of your business on your personal estate.
Each and every situation is unique and your personal circumstances will influence the solution that is best suited to you. We strongly advise that you consult a financial planner who will conduct a thorough needs-analysis and provide advice according to your individual goals and current financial position.