How life expectancy has increased over the last 100 years
The average age at death worldwide, often referred to as life expectancy at birth, has significantly increased over the last 100 years due to advancements in healthcare, sanitation, nutrition, and living conditions. Below is an approximate overview of global...
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Retirement investing strategies in your 20’s, 30’s and 50’s
What you need to consider when investing for retirement
Target Amount
You aim to have accumulated an amount that will afford you the lifestyle you deserve at your desired retirement age. This gives you a goal to work toward and should be discussed and calculated with your financial adviser to ensure your path to achieving the goal is clear and structured.
Inflation
Factor in the erosion of purchasing power over time. The goal amount you save needs to account for inflation, ensuring it maintains its real value. In higher inflation environments a more aggressive saving and investing strategy needs to be implemented.
Expected rate of return
The growth rate of your investments over time, considering both interest and market performance. The longer you invest, the more predictable the return becomes so start as early as possible.
Risk Tolerance
Younger individuals can typically take on higher risk, while older individuals need safer investments. Higher risk has the potential to deliver higher returns and this risk should be adjusted as you progress through your investment timeline. It is always good to have an annual review of your investment performance with your financial adviser to evaluate how your investments are delivering in terms of your goal.
Tax Implications
Take advantage of tax-efficient savings vehicles like retirement annuities, pension funds, and tax-free savings accounts. The maximum you are able to invest of your income is 27.5% without a tax implication on your income. In other words, if you earn R10 000 per month you are able to invest R2750 every month and only be taxed on R7250 in simple terms. There may be a tax implication when you retire and this would depend on the value at the time.
Lifestyle Goals
Your target should reflect your desired lifestyle post-retirement, including healthcare, travel, and other living expenses. take into account that you may need to travel to visit children or grand children, your healthcare needs are likely to be higher as you get older and you are likely to be living on a fixed income.
Employer Contributions
Maximize any employer-provided retirement contributions or benefits, as these significantly boost savings. Discuss this with your financial adviser to ensure you do not incur any unnecessary taxtes.
Retirement investment journeys at different ages
Starting to Save for Retirement at Age 25
Time Horizon – You have 40 years to save and invest.
Compounding Interest – With a long-term horizon, compound interest works in your favor, meaning even smaller, consistent contributions can grow significantly over time.
Risk Tolerance – At this age, you can take on more risk by investing in equities or growth-oriented assets, which typically offer higher returns over time. By using a higher risk strategy at a younger age you still have time to correct any unforeseen losses should they occur but if you are using a certified financial adviser, you will likely not incur losses over the long term.
Monthly Contributions – You can contribute relatively smaller amounts due to the longer timeframe, while still reaching your goal. if your investments outperform, you will have options like retiring early or accumulating more. It is always a good place to be when you are able to choose.
Diversification – You should focus on building a well-diversified portfolio, as time allows you to recover from short-term market volatility.
Savings automation – Start an automatic contribution plan to ensure discipline and consistency. Setup a debit order to ensure consistency and do not consider it as part of your monthly income. This type of discipline ensure maximum returns. Consistency is key. It is almost impossible to time the markets. Consistent monthly investments will ensure that over time you reap the rewards.
Key Strategy – Maximize contributions early, invest aggressively, and take advantage of the compounding effect. This will give you options as you get older.
Starting to invest for retirement at age 35
Time Horizon – You have 30 years to save and invest, still a decent period but less than at age 25. You need to consider that we are living longer with the average age at death increasing steadily, with women living longer than men in the developed World.
Increased Contributions – You’ll need to contribute a larger portion of your income compared to starting at 25 since compounding has less time to work its magic. Invest as much as possible and if you reach the 27.5% of your income invested already, please consult your financial adviser on the most efficient way to invest any amounts above that.
Moderate Risk – You can still tolerate some market risk but might start shifting toward slightly safer assets (e.g., a balanced fund).
Income Growth – As you may have a higher income at this age, you should aim to allocate a larger percentage of your income toward retirement. Again, if over the 27.5% consult your financial adviser or a certified tax practitioner.
Catch-up Contributions – Consider additional or voluntary contributions to retirement accounts to close any gaps if you’ve delayed saving.
Key Strategy – Increase savings rate, remain moderately aggressive in investments, and take advantage of any employer contributions.
Starting to save for retirement at age 50
Pay off any debt first – Debt is expensive and should be at an absolute minnimum by this stage of life. Perhaps you have changed jobs a few times and been invested in various retirement or pension fund schemes, check if there are any outstanding unclaimed benefits in your name. It is also a good idea to check any deceased family member ID numbers for unclaimed benefits you may be entitled to.
Time Horizon – You have only 15 years, so time is limited, and compounding has less impact. Perhaps you are an entrepreneur or suffered a significant loss, you need to pay special attention to your investing in order to be able to retire comfortably.
Significant Contributions – You’ll need to save a much larger portion of your income, likely around 30-40% or more to achieve your retirement goals.
Risk Mitigation – Shift toward more conservative investments (e.g., bonds, dividend-paying stocks) to preserve capital and reduce exposure to market downturns.
Retirement catch-up Plans – Utilize any retirement catch-up contribution options available, often offered to those 50 and older.
Expense management – Focus on minimizing lifestyle inflation and consider cutting non-essential spending to boost savings.
Delayed retirement – Consider delaying retirement by a few years if you’re significantly behind on savings, to give yourself more time to contribute. Perhaps consider starting a small business to supplement your retirement income.
Key Strategy – Prioritize large contributions, focus on low-risk investments, and consider working longer if necessary to meet the target.
Key strategies by age
Age 25: Focus on long-term growth, aggressive investments, and small contributions early for compounding benefits.
Age 35: Increase contributions, maintain moderate risk, and take advantage of employer match or tax breaks.
Age 50: Maximize contributions, prioritize capital preservation, and consider delaying retirement if needed.
Breaking free from overwhelming debt – A 9 Step strategy to regaining control
Debt can feel like a crushing weight, especially when it comes from multiple sources—mortgages, credit cards, student loans, and store cards. It’s easy to feel trapped in a cycle where minimum payments seem never-ending, and the overall debt keeps growing. But even when the situation feels overwhelming, there are tools and strategies you can use to regain control. Here’s a step-by-step guide to help you reduce and manage your debt effectively.
We always need to remember that credit institutions want you to settle the debt, they do not want to have to litigate, go through the reposession of assets process and all the other messy processes in order to recoup the debt. The most important thing to remember is to communicate with your credit providers before the situation becomes so dire there is little prospect of resolving the issue without a legal process. Also remember that you are not the first or only person who is in the situation you find overwhelming and the credit providers have seen it all before and know what is most likely to work to settle the debt.
Once you have freed yourself from debt you can start your retirement investing journey. Read about the different investing strategies at different ages to maximise your investments for retirement.
Acknowledge and Assess Your Debt
The first step is to face the reality of your situation. It can be intimidating to sit down and review every debt you owe, but this is essential for creating a plan. Write down each of your debts, noting:
- The total amount owed
- Interest rates
- Minimum monthly payments
- Payment deadlines
Having a full picture of your financial obligations will allow you to prioritize and create a strategy for reducing your debt. This step also helps reduce the mental clutter that often comes with debt.
Create a Budget and Identify Areas to Cut
Next, establish a clear budget. Track your income and expenses to see where your money is going. You might be surprised by how much you spend on non-essential items. By creating a budget, you can:
Identify areas where you can cut unnecessary expenses (e.g., dining out, subscription services)
- Free up more money to put toward your debt payments
- Gain a clearer sense of control over your financial situation
- Budgeting apps like Mint or YNAB (You Need a Budget) can help you track your expenses more easily.
Prioritize Debts Using a Strategy
When you have multiple types of debt, you’ll need to prioritize which ones to tackle first. Here are two common strategies which may or may not include getting a loan against your pension fund
This strategy may also include taking advantage of the ability to reduce your debt by tapping into the available funds in your 2 pot retirement portion of your pension fund.
South Africa has an enormous amount of unclaimed benefits which is sitting there waiting to be claimed. if you moved companies and did not claim your pension fund, or had a relative/spouse who had unclaimed benefits, it is certainly worth going through the exercise to see if there are any unclaimed benefits in your name.
Debt Snowball Method
Focus on paying off the smallest debt first while making minimum payments on the others.
Once the smallest debt is paid off, move on to the next smallest, and so on.
The psychological benefit of seeing debts disappear can motivate you to keep going.
Debt Avalanche Method
Focus on paying off the debt with the highest interest rate first.
Once the highest-interest debt is paid off, move on to the next one with the highest rate.
This method may save you more in interest payments over time.
Both approaches are effective—choose the one that best aligns with your financial and emotional needs.
Consider Debt Consolidation
If juggling multiple debts is overwhelming, debt consolidation might be an option. This involves combining several debts into a single loan with a lower interest rate or more favorable terms. There are a few ways to consolidate debt.
Balance Transfer Credit Cards: Some credit cards offer 0% or reduced interest interest on balance transfers for an introductory period. If you can pay off the transferred balance within the promotional period, this can save you a lot of money on interest.
Personal Loans: You can take out a personal loan to pay off multiple debts and then focus on paying off the loan at a lower interest rate.
Home Equity Loans or Lines of Credit: If you have equity in your home, this can be another way to consolidate high-interest debt at a lower rate.
However, be cautious when consolidating debt. It’s important not to rack up more debt while you’re paying off the consolidated loan.
Negotiate with Creditors
Many people are surprised to learn that creditors are often willing to negotiate. You may be able to:
- Ask for a lower interest rate
- Extend your repayment period
- Request a temporary reduction in payments
If you are struggling to make minimum payments, contact your creditors before defaulting. Many creditors have hardship programs that can provide temporary relief or more manageable payment plans.
Seek Professional Help
If your debt is truly overwhelming, it might be time to seek outside help. Consider:
Credit Counseling – Credit counseling agencies can help you create a budget, offer financial education, and even negotiate with creditors on your behalf.
Debt Management Plans (DMP) – A credit counselor can create a debt management plan where they consolidate your debt and negotiate lower interest rates, allowing you to make one monthly payment.
Debt Settlement – This involves negotiating with creditors to settle for a lower amount than what you owe. This option can negatively impact your credit score, so it’s best to use it as a last resort.
Bankruptcy – For those who are completely overwhelmed by debt and have no other options, bankruptcy can offer a fresh start. However, it comes with long-term consequences for your credit, so consult with a financial advisor or attorney before taking this step.
Build an Emergency Fund
One reason many people fall into a debt cycle is that they don’t have an emergency fund. When unexpected expenses arise, they turn to credit cards or loans. To break this cycle, try to build a small emergency fund while paying off debt. Even a modest R5000 to R10 000 can provide a buffer for unforeseen expenses like car repairs or medical bills.
Change Spending Habits and Mindset
Breaking free from debt isn’t just about numbers—it’s about changing your mindset and spending habits. Here are some tips to help you shift your financial behavior:
Avoid impulse purchases by giving yourself a 24-hour waiting period before buying non-essential items.
Focus on needs versus wants, prioritizing spending that adds real value to your life.
Embrace frugality and look for ways to save on everyday expenses.
Celebrate small wins, like paying off a credit card or reaching a savings milestone, to keep yourself motivated.
Stay Committed and Patient
Debt repayment can take time, especially if you’re dealing with large amounts from various sources. It’s important to stay committed to your plan, even when progress feels slow. Celebrate each milestone and remind yourself that every payment is a step toward financial freedom.
Getting out of debt when it feels unmanageable can seem impossible, but by breaking the process down into smaller steps, you can regain control of your financial life. Create a plan, stick to a budget, and stay motivated. Over time, you’ll see the debt shrink and your financial stress reduce, giving you the freedom and peace of mind that comes with being debt-free.
If you’re feeling overwhelmed, remember that help is available. Take the first step today toward a more secure financial future.
How does Debt Management Affect Your Credit Score
What is a credit score?
We have all seen the ads with the two guys sitting on the couch watching TV and discussing credit scores.
Your credit score is an indicator of how much of a risk any lender will have to take by lending you money or providing you with finance for any goods or services. It is determined by how well you manage your debt by making the required payments at the required intervals. It also takes into account any debit orders that may have been returned by your bank for insufficient funds. Basically, it is essential that you manage your finances and meet your contractual obligations in order to achieve a good credit score.
Your credit Score is something that you really need to take care of. It affects your ability not only to get credit, but the interest rate you are charged on credit agreements. Having a very Good credit score can make a significant difference to the cost of an item you buy on credit, and the longer the credit period, the greater the affect. Many employers will check a prospective employee’s credit score to get an idea of how disciplined you are with money or any other reason they may have.
With this in mind, a very good credit score can work in your favour by enabling you to get sub-prime rates on certain items like cars and home loans. A 1/2 percent difference on a large sum over many years can amount to many hundreds of thousands being saved by guarding your credit record.
Is it legal for employers to check your credit score?
The NCA (National credit act) allows employers to check a prospective employees credit rating if they are applying for a position which requires the prospect to handle money/finances or honesty. This it seems is however being abused where many employers are checking credit ratings for almost every type of position.
Here again, looking after your credit score could mean the difference between getting a job and being side-lined. This on it’s own is a good enough incentive to pay special attention to your credit score.
Debt management
Debt management will most certainly affect your credit score in that you will be paying less than the recommended amount of the loan agreements. Be very careful when you elect to go into debt management and try as far as possible to renegotiate with your creditors personally before electing for debt management.
Remember that the longer you stretch out your repayments, the more it is going to cost you in fees and interest and any future loans you take out will be at a premium rate, sometimes in excess of 10% or even 15% above prime. The reason for this is that you are now a credit risk. When you enter a debt management program, a debt counsellor will sit with you to determine the extent of your debt. It is important to be 100% honest with your debt counsellor, including any debts that may not be to a financial institution, but to friends, family or other lenders. The debt counsellor will take the total sum of all of your debt, the total of your income less your absolute minimum living expenses and come up with a repayment program that is on a reduced repayment basis with each creditor. In some cases and where it is possible, a single credit facility is established covering all of your debt, paying off the individual creditors and then making a single payment over a longer period.
There are many ways to skin a cat asd the saying goes and you would be well advised to be honest with yourself when assessing your debt. If you have a one account facility, an access bond or the ability to consolidate your debt, you should consider this as an option. The real question becomes, can you be disciplined enough to manage the single account and not get into any further debt until your position has improved and you have paid down your consolidated debt.
The most important factor to consider is to take your credit score very seriously. Once you have a low score, it is extremely difficult to get it back up again.
Use these loan and investment calculators to see what effect making incresed payments on loans
How to take a loan against your pension/provident fund
Taking out a loan against your pension fund capital or retirement savings in other investment portfolios is possible but their are a lot of hoops to jump through with the fund administrators, even if the fund rules allow for a loan against the capital amount in your fund.
It is important to remember that your retirement fund can only lend you money, or provide a guarantee for a loan, if the loan is used to buy, build or renovate a property which you, as a member of the fund, or your spouse occupy.
Update: 1 September 2024 – 2 pot system
accessing funds using the 2 pot system is not a loan
The two-pot retirement systems main goal is to help those who have been employed and are no longer employed to preserve the bulk of their retirement fuinds, while giving them access to a postion of their saving during difficult times.
Can I take a loan against my pension fund?
Pension or provident fund pay-outs are typically accessible after resignation, retrenchment, retirement, dismissal, or as part of a divorce settlement. Sometimes it is necessary to access funds quicker than the fund administrators pay it out and under certain circumstances, you can apply for a loan against the value of the fund.
The ability to take out a loan against the value of your pension fund can be done in one of two ways.
Loan directly from your fund
If the rules of your pension fund allow for members to take out loans, then a loan can be applied for directly from the administrators of your fund. As with any loan, be it against an asset like your pension fund, an unsecured loan, or any other loan for that matter, always read the fine print and be aware of the interest rate, charges and costs involved. It is also especially important to confirm that the company offering the loan is a registered financial service provider in good standing.
Use this link to independently confirm the status of the financial service provider.
Pay special attention to the specific terms that deal with a default on the loan repayment.
Banks or other institutions offering pension backed loans
You can apply for a loan from a bank or private lender where your pension fund is used as security for the loan. There are companies which offer pension bridging loans as a speciality product. Be very vigilant when signing any loan agreement, know the costs and fees involved and be sure that you understand the real implication in terms of a Rand Value, and, in particular the terms in relation to a default.
This type of loan is most often in the form of a bridging loan and can be against either a pension fund or a provident fund. The situations where you would typically use a bridging loan would be:
1. You have retired and need cash before your fund pays out.
2. When a family member dies, and you need cash to pay off debts or for funeral costs.
3. If you are a beneficiary of a deceased estate.
4. A court has awarded you a portion of your spouse’s pension/provident fund/RA and you need cash sooner.
5. If you have an annuity/endowment which is maturing within 6 months, you can generally apply for a loan against the value.
6. If you have fixed term savings accounts that are maturing in 4-6 months.
Fees associated with bridging loans against your pension fund/provident fund.
Pension backed loan costs
1. APR: This is the annual interest rate.
For example, if you loan R100 000 over 6 months and paid back the loan in one payment at the end of the 6 month period.
Loan Financed: R100,000
Upfront Out-of-Pocket Fees: not included in this calculation (see below)
Total of 1 Payments: R114,842.52
Total Interest: R14,842.52
2. Initiation fee: This is a fee the company charges for administrative purposes and can vary substantially from lender to lender so be sure to get more than one quote if you are going to go this route.
3. Service fee: There will be a further fee for service administration.
Use the following calculators to help you determine the actual cost of any loan.
There are other ways of utilising the value you have accumulated in your pension fund to access finance. For example, if you have a significant amount accumulated in your pension fund and need a home loan, there is such a thing as a pension backed home loan.
Consolidate your debt
Many people have asked for loans against their pension funds or provident funds in order to settle debts. There is an alernative to taking a loan against your long term savings for retirement, and that is to consolidate your debt into a single loan with a favourable interest rate over a period that makes repayments affordable.
You may have some short term debt that needs attention right away, or some medium term debt like car finance in the mix. By consolidating your debt, you take all of your debt, calculate a total and get a single loan which allows you to pay off all of the smaller amounts and then make a single payment.
This is an incredible option that a person who has experienced the pressure of being in too much debt feels like. If you are committed to getting out of debt, then debt consolidation should be considered.
The first option is to use any equity you have in a property that has accessible funds in an “access bond” The bond interest rates are the lowest they have ever been in SA. If you do not have a bond with an access facility, speak to your bank about the consolidation loan products they have available.
If you have changed jobs and were contributing to a pension/porovident fund, you may have unclaimed benefits owing to you. See if you have any unclaimed benefits.
Try not to touch your retirement savings, you are going to need it. Financial services are fraught with scammers, from banking scams to sim swop scams and accessing your pension fund proceeds through devious means and online scams is not unusual. Learn how to identify scams and avoid the devastation.
10 Ways to improve your position for retirement as you approach 60 years old
Many people lost large portions of the retirement savings by investing in the Sharemax scheme which has highlighted the position you may find yourself in as you enter retirement age. The sharemax scheme may have been a monumental blunder by regulators and the NPA when it came down to prosecuting the perpetrators but the fact remains, the returns were unrealistic and unwitting investors were quick to ihand over their hard earned cash to these fast talking salesmen and women. Naboomspruit was partiularly hard hit by Sharemax but was certainly not the only part of South Africa. There have been an alarming number of criminal schemes that have cost many hard working South Africans the comfortable retirements they deserve. South African savings data shows that only about 6% of South Africans have sufficient savings to afford them a satisfactory retirement.
If you find yourself in a position where you do not have enough to comfortably retire due to bad investments or simply due in part by not investing well or sufficient amounts during your working life.
Family wealth Custodians provide some very simple, actionable methods and ideas to increase your income before and after retirement as well as great ideas on how to increase you savings by making simple changes.
Often, when nearing retirment age and assessing your ability to sustain yourself into retirement, people come to the stark realisation that they have not saved enough and begin to seek out better returns. This is an incredibly dangerous mindset. There are unscrupulous operators out there that prey on that feeling of insecurity by offering unrealistic returns into schemes which are unregulated and make promises of unrealistic returns. Insecurity, desperation and greed often factor into poor decision making and these schemes are highly unlikely to return anything but heartbreak and misery.
Sit down, take out a pen and pad and listen to this video, it may just be the best 13 minutes of your time you have ever spent.
Video by Family Wealth Custodians
2 pot pension fund system discussed (video)
The 2 pot system has become extremely confusing for some people so a lengthy discission was had with financial planners and experts from Glacier by Sanlam, moderated by Balin Herman. This is by far the most comprehensive discussion with questions and answers from the public. Is it in fact a 3 system pot and what does it mean?
This video gives a really good explanation of the system, how it works, what you can and cannot do with it and how best to use the options available. They make use of very simple graphic representations of the system including making use of actual Rand values used, making it much easier to understand and visualise.
This explanation also clearly shows the impact of compound interest on your investments and what difference a relatively small withdrawal will make.
This is a very good video which answers a lot of questions not covered in the sometimes very complicated explanations by the financial services industry.
Some of the questions answered.
- How much will you get out after tax if you make a withdrawal?
- If I want to access the money in my pension fund do I need to resign?
- How much tax will be deducted when I withdraw from my fund?
- Can I withdraw the money from my pension fund to buy a car?
- Can I use the money from my pension fund for a medical emergency?
- Is the government considering making withdrawals from pension funds tax free?
- Is it possible to access more than the R30 000?
- How do you make the withdrawal?
- Is the R500 administration fee applicable?
Who comments on the system on this video
- Blain Herman
- Zwelenzima Vavi – SAFTU
- Zanele Sabela – COSATU
- Khanyi Nzukuma – Sanlam Glacier
Update 4 September 2024:
We have had a large number of enquiries on where to access the forms to withdraw from your pension fund or other retirement products so we reached out to some of the fund administration companies to get an answer.
Here is an example from some of the major administration companies which clearly outline the process involved and how to go about making the application for a withdawal.
Liberty: How to access your funds in the two pot system
This is a very easy to understand infographic which clearly outlines what needs to be done.
Momentum: Steps to follow to withdraw from your 2 post savings
Momentum have a whatsapp chat which is extremely efficient. This infographic also clearly explains the process to withdraw.
You would need to check foirst of all that the administration company has implemented the processes necessary to make the withdrawal. If you work for a large company that has an HR department, that would be your potrt of call. if not, check your statement and visit the companies website for more info on the withdrawal process.
In all cases you will need the following.
- Update or confirm your personal details
- Request the values available for withdrawal
- Apply for the savings benefit access
- Ensure your Tax affairs are in order
This process is not like withdrawing at a bank and may take some time before you receive your money.
Post retirement work opportunities
There are many work opportunities available for retired people, whether you are a professional, an administrator, customer services, sales person, have a flair for the arts or simply good at something. The opportunities are literally endless if you know where to look. The most obvious are consulting/mentoring or something along those lines, where you pass on your wealth of knowledge and skills to the younger generation but some of the other opportunities may surprise you. Here’s a comprehensive listing, along with explanations.
Before you read any further remember that this online world is inhabited by scammers in every little corner so read this article about keeping safe online before you start engaging with anyone outside of a well known platform and always do a search for “…… reviews” “Indeed job board reviews” for example to ensure that you are transacting with a legitimate organisation.
How to Access post retirement work opportunities and what services are offered
Working post retirement is often about making ends meet but not always. We all need something to get up for in the morning, a purpose, a need to feel needed and appreciated and working can often provide just that!
Consulting and Freelancing
Retired professionals can leverage their many years of experience by offering consulting services or freelancing in their area of expertise. This can include anything from business consulting, financial advising, to freelance writing or graphic design. Never underestimate what you learned in your many years of working, there is someone out there who wishes they knew what you have already forgotten.
How to Access
Online Platforms
Websites like Upwork, Freelancer, and Fiverr allow professionals to offer their services to a global market. The registration process is simple enough and the platform takes a percentage of your earnings. View other profiles that offer similar services to your offer and create your profile accordingly. Most platforms will off best practise advise on creating a compelling offer and profile… Take the advice and create a profile that people will want to engage with.
Networking
Leveraging professional networks, such as LinkedIn, or attending industry events can help secure consulting gigs. For example, if you are an engineer ECSA would be a good place to start. Look up old colleagues ort contact companies yuou worked with prior to retiring, you will be amazed at how receptive people are.
Consulting Firms
Some firms specifically cater to retired professionals looking for part-time or project-based consulting work, such as Toptal or Patina Solutions. Toptal for example offers talent from the top 3% which is You my friend!
Services Offered
These platforms typically offer profile creation, project bidding, client management, and payment processing services. Take the time to invest in your profile. Have a great picture taken and sell your talent and years of experience.
How to Access
Online Tutoring Platforms
Websites like Teachmeto, Superprof, Pret2perfection and Preply are the most well known South African platforms but dont forget there are others like Tutor.com, VIPKid, and Wyzant allow tutors to connect with students.
Community Centers
Local community centers or libraries often have programs that seek experienced tutors. Check the pinboards or ask the librarian, if nothing else you will get to know a few new people who are likely to share your passion for education.
Schools and Universities
Some schoold in SA have a list of preferred tutors or personal teaching assistants who have achieved good results for their students. Some colleges and universities hire retired professionals as adjunct professors or guest lecturers, so if you are an expert in a particular firld or were part of a landmark project, talk to the lecturers or administration about imparting some of your knowledge and experience.
Services Offered
These platforms provide student matching, lesson planning tools, and payment processing.
Part-Time or Seasonal Jobs
Many companies offer part-time or seasonal work, which can be ideal for retirees who want to stay active but aren’t looking for full-time commitments. Perhaps they are being audited, need assistance with tender preparation or have a task to migrate their paper filing system to a digital system as examples. Somewhere out there is a company in need of your expertise.
How to Access
Websites like Indeed, Glassdoor, and SimplyHired have dedicated sections for part-time and seasonal jobs. Perhaps you just want to work during the winter instead of staying indoors and watching television. Although that is an option, some advertising agencies offer the opportunity to listen to radio or watch television to confirm how many times their clients advertising inserts are played or displayed.
Local Retailers
Many local stores or retail chains hire seasonal workers, especially around holidays. Standing behind a counter meeting shoppers might be just what you need to keep occupied. Give them a try, sometimes all it takes is to walk into a store you have been shopping at for years and offering your services.
Hospitality and Tourism
Resorts, hotels, and travel agencies often seek part-time help during peak seasons checking people in and offering support to guest services personnel.
Services Offered
These job boards and companies often provide job listings, application management, and sometimes even interview scheduling.
Tutoring and Teaching
Retired teachers or professionals with expertise in a particular subject can offer tutoring or teaching services. This can be done in person or online. Helping students with their course work or understanding concepts that their teachers have not been able to pass on effectively, marking past papers. Tutors are very high demand and if you are able to offer a one on one service, you could be in the pound seats.
Remote Work
With the rise of remote work, many opportunities are available for retirees who prefer to work from home. This can include customer service, virtual assistance, or data entry. Offering your services as a personal secretary, taking calls, sending proposals or bookling interviews may be an opportunity that interests you.
How to Access
Remote Job Boards
Websites like Remote.co, FlexJobs, and We Work Remotely specialize in remote job listings.
Company Websites
Many companies post remote job openings on their own websites.
Virtual Assistant Platforms
Companies like BELAY or Time Etc hire virtual assistants who can work from home.
Services Offered
These platforms provide job matching, remote work tools, and often training resources.
Non-Profit and Volunteering Opportunities
Many retirees look for meaningful ways to give back to their communities. Non-profits often have positions that are paid or volunteer-based.
How to Access
Volunteer Websites
Websites like VolunteerMatch and Idealist connect volunteers with non-profits.
Local Non-Profits
Directly contacting local non-profits or community organizations can also yield opportunities.
Services Offered
These platforms often provide volunteer matching, training, and occasionally stipends or small salaries for certain positions.
Healthcare and Caregiving Roles
With the growing need for caregivers around the World, especially in the aging population, there are opportunities for retirees to work as part-time caregivers, companions, or in healthcare-related roles. Many South Africans take part time work as caregivers in the United Kingdom for example. This is more common than one would expect.
How to Access
Caregiver Agencies
Companies like Home Instead, Visiting Angels, and Care.com offer caregiving jobs. There are literally endless opportunities for carers including live in caring positions. Just do a google search for “live in carer jobs in the uk”/usa/etc and you will be amazed at how many opportunities there are out there. There are visa requirements which you need to consider and may be best to go through a Visa agency connected to the work opportunity.
Hospitals and Clinics
Some healthcare facilities hire part-time or per diem staff.
Local Community Services
Community centers and senior services often need part-time help.
Services Offered
These organizations typically provide job matching, training, and support services.
Creative and Artistic Pursuits
Retirees with creative talents can pursue opportunities in art, writing, music, and more. This can include selling art, writing books, or even performing. Some performers have formed groups that go from retirement village to retirement village offering to perform for free or very little to entertain those less fortunate but of course there are also many opportunities to make a little extra cash
How to Access
Online Marketplaces
Websites like Etsy for arts and crafts or Amazon Kindle Direct Publishing for self-publishing books. Use the Facebook marketplace to sell your art or baked products. Christmas time is an excellent time to put your baking skills to good use making fruit cakes or mince pies, hand made Christmas greeting cards or small gifts. If you are making/baking for your family, make a few extra and let everyone know you are available to do so.
Local Galleries and Fairs
Participating in local art shows, galleries, or craft fairs. Most residential areas have a local market at least once a month. For example the Fir=eld market in our area at the field and study centre in Parkmore. There is also a monthly artists in the park show in Hurligham proper as an example. Scan your local community newspapers or area specific groups on facebook for this information .
Creative Agencies
Agencies or platforms like Voices.com for voice acting or 99designs for graphic design.
Services Offered
These platforms offer sales tools, marketing, and sometimes community support for artists.
Virtual Mentorship
Retired professionals can mentor younger professionals or startups through virtual mentorship programs. There is a shortage of qualified and competant staff in most professions these days and on occasion the opportunity may arise where a highly experienced and qualified professional is required to assist/mentor new staff. These opportunities can be extremely rewarding and very lucrative.
How to Access
Mentorship Platforms
Websites like SARA mentorship programs HERS (Higher Education Resource Services – South Africa) and others, which partner with the Business and SETA’s, offer mentoring opportunities.
Industry Associations
Many professional associations offer mentorship programs. Contact your professional bodies and offer your services.
Services Offered
These platforms provide mentor-mentee matching, communication tools, and resources for effective mentoring.
Temporary and Contract Work
Retirees can take on temporary or contract work for companies that need short-term help. This can be in fields like accounting, legal work, or project management.
How to Access
Temp Agencies
Agencies like Linkedin, Pnet, Indeed, Adzuna in South Africa as well as Kelly Services or Robert Half specialize in placing professionals in temporary roles.
Company Websites
Many companies post temporary job openings on their career pages. If you are an engineer, do a google search for “Engineering companies near me” Visit their websites and if there is nothing being offered, send them an emailk offering your services and indicating where you would be able to assist them.
Gig Platforms
Websites like TaskRabbit or Thumbtack connect workers with short-term gigs.
Services Offered
These platforms provide job matching, contract management, and sometimes benefits for long-term contractors.
Online Surveys and Market Research
For those looking for easy, low-commitment opportunities, participating in online surveys or market research can be a good fit.
How to Access
Survey Websites
Sites like Swagbucks, Survey Junkie, and Pinecone Research offer paid surveys.
Market Research Panels
Companies like Nielsen or Ipsos offer panel participation with incentives.
Services Offered
These sites offer easy access to surveys and research panels with payment in cash, gift cards, or other rewards.
These opportunities provide a range of options depending on interests, skills, and how much time retirees want to dedicate to work. Most of these platforms and services are easily accessible online, making it straightforward to get started.
Safeguarding Your Finances: Guide to Recognizing and Avoiding Financial Scams
With the growing of the digital age, so too has the proliferation of financial scams. Stats show that the amount of data available online is doubling every two years! With info available at the touch of a button, ensuring your financial safety requires vigilance and awareness. Below, are outlined common scams and the actionable advice to help protect yourself from financial fraud.
Fake Account Security Calls
Scammers may contact you, pretending to be from your bank, and claim that your account has been compromised. These impostors often use sophisticated methods to obtain personal details and create a sense of urgency, urging you to transfer funds to a ‘safe’ account.
Recommended Action: Hang up immediately, block the number, and report the incident to your bank. Remember, legitimate banks will never request such actions via phone.
Investment Scams
Fraudsters may claim to offer superior investment opportunities that promise extraordinary returns. These pitches are designed to lure you into making quick decisions.
Recommended Action: Disconnect the call, block the number and report the incident to your bank. Always consult with a certified financial adviser before considering any new investment opportunities.
Unsolicited Requests for Personal Information
Be cautious of unexpected calls, emails, or messages requesting personal information. These can be phishing attempts designed to steal your identity.
Recommended Action: Delete suspicious emails and block unknown numbers. Do not provide any personal details.
Risks of Sharing Personal Photos Online
Posting personal photos on social media can expose you to identity theft. Scammers can use images to extract biometric data, such as facial recognition or fingerprints, which can be used fraudulently.
Recommended Action: Consider limiting and adapting the type of images and data you post on your social media platforms to minimize risks.
Unsafe Browsing Practices
Visiting unsecured websites can compromise your personal data, which may be shared with marketing companies and potentially the dark web.
Recommended Action: Exercise caution when browsing online. Use secure, reputable websites and consider employing a virtual private network (VPN) for added security.
Credit Card Fraud
Beware of using your credit card at toll gates or other potentially insecure locations. Scammers may use card skimmers or tap-and-go technology to steal your card information.
Recommended Action: Keep your card in sight, use chip-and-pin transactions instead of tap-and-go (as micro-chip signals can be intercepted), and consider using cash or a non-chip card for transactions in potentially risky environments.
Public Wi-Fi Risks
Avoid conducting financial transactions over public Wi-Fi networks, as these can be insecure and expose your information to others on the same network.
Recommended Action: Use a secure, private network for financial activities, and consider using a VPN when connecting to public Wi-Fi.
Bluetooth Security
Leaving Bluetooth enabled on your phone can make it vulnerable to unauthorized access.
Recommended Action: Turn off Bluetooth when it is not in use to protect your data from potential breaches.
Online Purchases
When shopping online, be cautious about whom you share your credit card details with. Fraudulent sites can quickly misuse your card information.
Recommended Action: Only purchase from trusted, reputable sources. If in doubt, seek alternative payment methods or contact the seller directly. Do background checks on well know review sites.
Safeguarding Your OTP
Your One-Time Password (OTP) should never be shared with anyone, even if they claim to be from your bank or service provider. Scammers may use various tactics to obtain your OTP and access your accounts.
Recommended Action: Never disclose your OTP to anyone. Contact your bank immediately if you suspect your OTP has been compromised.
Recommended Action: Never disclose your OTP to anyone. Contact your bank immediately if you suspect your OTP has been compromised.
Sim Swop
Fraudsters contact your mobile service provider, pretending to be you and ask for a transfer of your existing cellphone number to a new SIM card, or they ask that your number be moved to another mobile service provider. By gaining control of your number, your messages are rerouted to the fraudster, these include One Time Pins (OTPs) and other personal messages. Fraudsters may use this and other compromised information to fraudulently take over your banking profile or changing instructions such as card delivery address.
Recommended Action: If you lose cellphone connectivity or receive an SMS indicating that you have requested a SIM swop, which you did not, do NOT ignore the message. Contact your service provider AND our Fraud Line. NEVER share your OTP with anyone to authorise any activity that you did not initiate.
In Conclusion
When in doubt, always reach out to your bank’s fraud hotline to report suspicious activity or seek guidance, if you feel your information’s may have been breached, rather instruct them to block the bank account. May this guidance assist you in maintaining financial security in an increasingly complex digital landscape.
By Mauro Armellini
Financial Advisor & Director at Arena Insurance Consultants
Tel: Tel: +2711 501 3393
Website: arenainsurance.co.za
Mauro has an abundant wealth of knowledge in both short-term, long-term and investment sectors. After being in the industry since 1984, he is fluent in Wealth Management on a global platform. For tailored financial advice feel free to contact him on mauro@arenainsurance.co.za
Image credit: Sora Shimazaki
How your prension fund proceeds are distrubuted if you die before retirement age
In South Africa, the payment of retirement fund proceeds on premature death is governed by the Pension Funds Act of 1956. When a member of a retirement fund dies before reaching retirement age, the benefits are not automatically paid out according to the member’s nominated beneficiaries. Instead, the distribution is handled according to specific legal guidelines to ensure that dependents are adequately provided for.
Who is entitled to the benefits?
Dependents
Legal Dependents: These include a spouse, children (including adopted and stepchildren), and any other persons who were financially dependent on the deceased member at the time of death.
Factual Dependents: People who were not legally dependent on the deceased but were financially supported by them, such as a partner, parents, or other relatives.
Future Dependents: Individuals who would have become financially dependent on the deceased in the future, such as an unborn child.
Nominees
These are individuals or entities nominated by the member in a beneficiary nomination form. However, a nomination does not guarantee that the nominee will receive the benefits as the board of trustees still needs to take into account the needs of dependents. This is a process which the trustees of the fund need to investigate and apportion accordingly.
Who Decides How Much Each Beneficiary Gets Paid?
The distribution of retirement fund proceeds is determined by the board of trustees of the retirement fund. The trustees have the responsibility to ensure that the benefits are distributed fairly among the dependents and nominees within a reasonable amount of time.
Investigation process
The board of trustees is required to conduct a thorough investigation to identify all potential dependents and nominees. This involves gathering information about the deceased member’s family, financial dependents, and any nominations made by the member.
Decision-Making
The trustees have the discretion to decide how to distribute the benefits among the dependents and nominees. They must take into account the financial needs of each dependent, the extent of their dependency on the deceased, and any other relevant factors. The distribution does not necessarily have to be equal; it is based on the specific needs and circumstances of each individual.
Distribution
After the decision has been made, the benefits are paid out to the beneficiaries as determined by the trustees. The payment can be made as a lump sum, an annuity, or a combination of both, depending on the rules of the retirement fund and the preferences of the beneficiaries.
Key Points to Note
The board of trustees has wide discretion in deciding how to allocate the benefits, which is designed to protect vulnerable dependents. However, their decisions can be challenged if a beneficiary believes the distribution was unfair.
Timeframe: The trustees are required to make a decision and distribute the benefits within a reasonable period, typically within 12 months of the member’s death.
Tax Implications: The retirement fund death benefits may be subject to tax, depending on the nature of the fund and the form in which the benefits are paid out.
This system is intended to ensure that the dependents of the deceased are adequately provided for, even if the deceased member did not update their nomination form or if the member’s will does not reflect the current situation. If there are for example, claimants like a dependent or children from an undisclosed relationship or a person that the contributor assisted financially making them dependent on the funds available, all of these would be considered.
Image credit: Photo by Alexander Dummer
Compound interest equation and comparison calculations
You will have heard how powerful compound interest is at building wealth but how do you calculate the future value of a savings account of, for example R10 000/year over 40 years if you reinvest the interest every month?
Compound interest is an incredibly powerful force in retirement savings, in fact, it’s one of the most important tools you have in your in vesting and savings arsenal when it comes to building a retirement portfolio that will allow you to retire with complete peace of mind.
Compound interest is the interest earned on the capital of an investment, as well as on any previously accrued interest. This means that over time, your interest earnings can grow exponentially as you reinvest them back into your portfolio. The longer you let your interest accrue, the more powerful the effect becomes.
Investing for retirement is all about consistently investing over a long period of time. Any market analyst will show you that over time the markets are always on an upward trajectory, the key is not to fear the short term downturns but to keep investing every month at the same level to achieve a long term positive outcome. This is exactly how compound interest works, long term investing of your capital and interest which then compounds into a very nice return over time.
Time is your greatest ally when investing and the smart money says to start investing from your first paycheck and keep investing every single month from that day onward. The longer you have to invest, the more time your money has to grow and compound.
Investing Scenario
Let’s say you start investing R10,000 per year in a retirement account at age 25. Thats is less than R1000/month. Lets assume an annual return of 8% which is a money market account or similar at most banks these days.
When you get to 65, your investment will have grown to a little over R3 000 000.
If you had started investing just five years later, at age 30, your investment would only be worth around $2 080 000. That’s a difference of over R1 000 000 by starting just 5 years later.
The power of compound interest is especially evident when you consider the effects of compounding over time. Let’s say you invest that same R10 000 per year at age 25, but instead of investing for 40 years, you invest for 50 years. Assuming the same 8% annual return, your investment will have grown to over R9 000,000 by the time you reach age 75. That’s almost three times as much as if you had invested for just 40 years.
It really is as simple as that. Start early, invest consistently, capitalise the interest and you will reap the incredible rewards of the “power of compound interest”. Now imagine you invested in a portfolio of stocks that showed a higher return over long periods! It all depends on what your attitude towards risk is. You can of course diversify your portfolio by having a conservative savings investment like the example above and then to invest into a different type of fund that has a higher risk profile but over time will again offer higher potential returns. It is always the right thing to do to consult a financial advisor to help you prepare for retirement and optimize your investmkent portfolio but be sure that the fees are not exorbitant. Fees can have a significant impact on your returns.
By allowing your interest earnings to compound over time, you can significantly grow the value of your retirement portfolio. The key is to start investing as early as possible and to give your money as much time as possible to grow and compound. So if you haven’t already started investing for retirement, now is the time to get started. Your future self will thank you.
Future value equation
Here are the equations that will help you calculate the future value of your investment strategy.
Example 1
You Invest R10 000 per year for 40 years at an annual return of 8%
Assuming annual contributions of R10 000 and an annual return of 8%, the value of the investment after 40 years can be calculated using the following formula:
Equation
FV = P * (((1 + r) ^ n) – 1) / r
FV = future value
P = periodic contribution (in this case, R10 000 per year)
r = annual interest rate (as a decimal, so 8% = 0.08)
n = number of periods (in this case, 40 years)
Using these values, the future value of the investment can be calculated as follows:
FV = R10 000 * (((1 + 0.08) ^ 40) – 1) / 0.08 = R3 015 055.62
Example 2
Investing R1,000 per year for 50 years at an annual return of 8%
Using the same formula as above, the future value of the investment can be calculated for 50 years as follows:
FV = R10,000 * (((1 + 0.08) ^ 50) – 1) / 0.08 = R6 665 733.81
As you can see, the power of compound interest is evident when you compare the future values of the two investments. By investing for an extra 10 years, the future value of the investment more than doubled. This is why it’s so important to start investing for retirement as early as possible and to give your money as much time as possible to grow and compound.
Photo by Edward Howell