How to Reach R10 Million by 65 Here is a Practical Guide for Every Age
For many working South Africans, the magic lump sum you need at retirement is R10 Million excluding the value of your home/cars and other assets, R10 Million in cash to Live a happy financially secure retirement. You don’t need to be rich, lucky or a financial genius...
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Step-by-Step to Financial Freedom. Read this Guide to Smart Investing
You don’t need to be rich, lucky or a financial genius to become a successful investor. You just need the right mindset, a bit of patience and a solid plan. With the help of a qualified financial planner, anyone can start building real wealth and even leave something meaningful behind for future generations.
Let’s unpack how everyday people can use smart, steady investing to achieve long-term financial freedom.
Investing isn’t just for the wealthy
There’s a common myth that investing is only for people with lots of money or a deep understanding of the markets. But that’s just not true.
If you’re earning a monthly income, you can start investing. Whether it’s R500 or R5,000 per month, the key is consistency. One of the biggest advantages you have as an investor is time and the sooner you start, the better.
The secret sauce is compounding
Albert Einstein reportedly called compound interest the eighth wonder of the world. Why? Because it’s how your money starts earning money and then that money earns even more money.
Let’s say you invest R1,000 a month, and it earns a return of 10% per year. In 20 years, you won’t just have R240,000 you could have nearly R700,000, thanks to the power of compounding. The longer you leave your money invested, the more it can grow.
This is why consistent investing, even in small amounts, can make a big difference over time.
Why a financial planner can make all the difference
A certified financial planner is like a coach for your money. They help you make the best decisions based on your income, goals and life stage. They’ll also help you avoid costly mistakes like selling when the market dips or putting all your money into a risky investment.
Good financial planners can also guide you through tax-smart strategies, retirement planning, and making sure your money keeps working for you, even after you’ve stopped working.
Habits that set successful investors apart
- They Invest First, Spend Later – Before they splash out on new shoes or a holiday, successful investors put money into their investments. Many use automated monthly debits so that saving happens before they even see the cash.
- They Reinvest Their Earnings instead of withdrawing dividends or profits, they reinvest them. This allows compound growth to do its magic.
- They Stay Calm When Markets Get Bumpy – Markets rise and fall. It’s normal. What matters is how you react. Selling in a panic during a downturn can lock in losses. Smart investors stick to their plan and ride it out.
- They Keep Learning, whether it’s reading reliable financial websites, books, or working with an advisor, successful investors are always building their knowledge.
- They Diversify, they don’t put all their eggs in one basket. Instead, they invest in a mix of shares, bonds, property, and even different countries. This helps protect them when one area underperforms.
- They Control Their Emotions. Fear and greed can ruin good investing decisions. Disciplined investors avoid chasing hype and steer clear of emotional decisions.
- They Avoid Lifestyle Inflation. As they earn more, they don’t spend more. Instead, they keep their lifestyle modest and invest the difference.
Long-term thinking wins
Many people want quick results. But real wealth takes time. Markets go through cycles. There will be tough years and great years. The goal isn’t to get rich overnight it’s to build something that lasts.
One smart strategy is rand-cost averaging investing the same amount regularly regardless of whether the market is up or down. This helps you avoid trying to “time” the market and smooths out your investment journey.
Avoiding common mistakes
Here’s where a good advisor can really help. Many investors get caught up in fear, excitement or hype. That’s when they make emotional decisions like pulling out of the market after a drop, or buying into something that sounds too good to be true.
Certified financial planners help you tune out the noise and stay focused on your long-term goals.
They’ll also make sure your money is:
- Spread across different assets and sectors
- Aligned with your risk appetite and life stage
- Structured in a tax-efficient way
- Reviewed regularly to stay on track
It’s not just about you
Smart investing is also about planning for the next generation. Many successful investors think about their family’s future. They set up wills, trusts, and estate plans to protect their wealth.
They also teach their kids about money because passing on good habits can be more valuable than passing on cash.
Anyone can do this
Successful investing isn’t about luck. It’s about small, smart steps taken consistently over time. It’s about learning, being patient, avoiding hype, and knowing when to get expert help.
Whether you’re just starting out or already have investments, the most important thing is to have a plan and stick to it.
Partnering with a certified financial planner can help you stay on course, make confident decisions, and avoid pitfalls. With time and discipline, you’ll build real wealth and maybe even leave a legacy.
It’s not magic. It’s just good habits and smart planning.
Markets Are Shaky and here’s why you should not be
Why patience is one of the most powerful investing tools you have
We all set goals. We plan for the future, work hard, and try to make smart choices. But sometimes, when it comes to investing, the smartest choice is to do… absolutely nothing.
Yes, nothing. That may sound strange, but in turbulent markets, staying calm and staying put is often the best course of action.
Let’s talk about why our emotions can sometimes get in the way of smart investing, and how a little patience can go a long way toward helping you reach your financial goals.
Why we’re wired to react and why that can hurt your investments
Our brains are designed to keep us safe. Thousands of years ago, that meant reacting quickly to physical threats. Today, that same fight-or-flight instinct kicks in when we feel our money is at risk, like during a market drop.
Your heart races. You feel like you need to do something. But acting on emotion — like panic-selling your investments can hurt your long-term returns.
Jason Zweig, a respected financial journalist and author of Your Money and Your Brain, says the three most important traits an investor can have are: independence, skepticism, and emotional self-control.
Emotional self-control means staying steady, even when markets feel shaky. And that takes practice.
Market drops happen but so does recovery
Here’s something to remember: markets always go up and down. Volatility is normal. In fact, there’s never been a year without some level of market uncertainty.
Trying to predict every rise and fall? That’s exhausting and it usually doesn’t work. What does work is staying invested through the ups and downs.
Warren Buffett one of the world’s most successful investors famously said
“Investing is simple, but not easy.” What he means is, the idea of staying in the market long-term is simple to understand. But emotionally, it’s hard when prices are falling.
Benjamin Graham, Buffett’s mentor, put it like this
“In the end, how your investments behave is much less important than how you behave.”
Your mindset matters more than market movements.
The Power of Patience
Patience is one of the most underrated investing skills.
If you can resist the urge to constantly check your portfolio, or to make big changes when the market dips, you’ll likely come out ahead. Why? Because of something called compounding — where your investments grow, and then those gains also grow over time.
It’s a slow build, but the rewards are big if you let time do its thing.
So, What Can You Do (or Not Do)?
Here are a few simple but powerful habits to help you stay patient and on track:
Stick to your plan. A good investment plan is built for the long haul. Trust it — and the people helping you manage it.
Expect ups and downs. Markets are always moving. Accepting this can help you stay calm.
Focus on time in the market, not timing the market. You don’t need to pick the perfect moment you just need to stay in.
Know the difference between fear and facts. If markets drop on emotion (fear), don’t act on impulse. But if something fundamental has changed (like your income or life situation), that’s worth reviewing.
And remember this quote from Ethan Hawke’s Rules for a Knight:
“There is a moment for action, and with a clear mind that moment is obvious.”
Sometimes, the best action is no action at all.
Impatient investors tend to make poor decisions, buying or selling at the wrong time, checking their accounts too often, reacting to headlines instead of facts.
But patient investors? They keep going. They focus on the long-term. And they’re the ones most likely to see real results.
So if the markets feel scary right now, take a breath. Step back. Talk to your financial advisor if you need reassurance. Then stay the course.
You don’t need to react to every market move. You just need to stay invested and stay patient.
“Personally, I find this comforting. I can control my behaviours, but not those of others.”
And that’s more than enough to succeed.
Global Diplomacy and Financial Guidance and Will Planning: The Foundations of Prosperity
Why Partnering with a Professional Wealth Adviser Matters More Than Ever
In South Africa, the lines between financial advisers and insurance brokers are often blurred. Many consumers perceive these roles as largely transactional: selecting the right life policy or investment fund. While those services remain essential, the true value of comprehensive wealth management lies well beyond product selection.
At Arena Insurance Consultants, our role is not just to advise but to partner with you—discreetly and strategically—on all aspects of your financial journey. Our advisers act as informed co-navigators, interpreting the economic landscape and guiding you through the maze of financial decisions with insight and experience.
What does that mean in practice?
We help our clients with
• Navigating both local and international financial markets
• Understanding corporate structures such as trusts, foundations, and private investment companies
• Cross-border tax implications and regulatory compliance
• Asset protection and estate planning strategies
• Raising capital for business ventures, both domestically and abroad
• Listing companies locally and internationally
• Implementing tax-efficient, opportunity-driven investment portfolios
Having advised clients for over four decades, we have cultivated deep knowledge and global insight that now inform our own investment initiatives, including exclusive funds such as The Arena Funds. These initiatives are designed to offer our clients access to sophisticated strategies typically reserved for institutional investors.
In an era of rapid change, a well-informed financial partner is no longer optional, it’s essential.
Wills & Testaments: Protecting Your Legacy
Estate planning may not be a favourite topic, but it is one of the most critical elements of a secure financial plan. Surprisingly, more than 80% of South Africans still don’t have a valid will in place. A common misconception is that wills are only necessary for the wealthy. In truth, anyone with dependents, assets, or specific wishes for the distribution of their estate needs one.
Why It Matters
Without a valid will:
• The distribution of your estate will be governed by intestate succession law—not your personal wishes.
• Minor children may be placed under state-appointed guardianship, both financially and in terms of caregiving.
• Loved ones can face legal and financial uncertainty during an already difficult time.
Multi-Jurisdictional Estates
If you own assets in more than one country—such as South Africa and Italy—you’ll need separate wills tailored to each jurisdiction. Not doing so can lead to legal conflicts, double taxation, and significant delays in settling the estate.
Important note: A will drafted in one country may not be recognised in another, and tax liabilities can vary widely across borders. These complex nuances are best handled in a one-on-one consultation, where we can develop a strategy tailored to your international estate.
Planning for the Cost of Death
Many estates lack the liquidity to cover taxes, debt, executor fees, or cash bequests. This can result in forced asset sales or financial hardship for surviving family members. Proactive planning—often through well-structured life insurance policies—can ensure these costs are covered without disrupting your long-term wealth plan.
Key Considerations When Drafting a Will
• Blended families: Clearly define the rights of biological and stepchildren. Stepchildren do not automatically inherit unless specified.
• Divorces and joint wills: Post-divorce, you have 90 days to amend a joint will. Failure to do so may unintentionally benefit an ex-spouse.
• Dependents: Parents or siblings dependent on you may not inherit automatically but can claim from your pension fund if they prove dependency.
• Unmarried partners: New court rulings have begun granting rights to long-term partners in the absence of a will. A clear will removes ambiguity and ensures your wishes are carried out.
Confidence Through Clarity
A comprehensive estate plan, combined with an informed investment strategy, offers more than just financial returns—it brings peace of mind. When your affairs are professionally managed, you can focus on living your life, knowing your legacy is protected.
At Arena Insurance Consultants, we are here to ensure your plan is both robust and responsive to today’s ever-changing world. Whether you’re expanding internationally, navigating life transitions, or simply want to optimise your investment approach, our door is always open.
Let’s Talk.
Your future deserves more than good intentions—it deserves expertise.
Contact us today to schedule a strategy session.
Warm regards,
Arena Insurance Consultants Team
Strategic. Informed. Invested in You.
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 by Tumisu
The $1000 hotdog and why you need to start investing today!
There’s a magical financial force so powerful, yet so sneakily subtle, that even brilliant minds struggle to grasp its full potential. It’s not flashy. It doesn’t scream for attention. But quietly and persistently, it builds empires.
It’s called compounding and it just might be the closest thing to financial wizardry this world has ever known.
Why is compounding so hard to believe?
Here’s the thing: our brains are hardwired for linear thinking. Ask yourself what 8 plus 8 plus 8 equals, and you’ll nail it in seconds. But try 8 times 8 times 8 times 8, and your brain throws its hands up. It’s not our fault. It’s just how human cognition evolved.
That’s why compounding feels like a riddle. We get the idea, money earns money, which earns more money. But the scale? The pace at which it snowballs? That’s where we often fall short.
ice ages and compound interest, the surprising connection
Ready for a little twist of science? Geologists long believed that viciously cold winters kicked off Earth’s ice ages. Turns out, they were wrong. It all began with one modestly cool summer. The snow didn’t melt and when next winter came, more snow piled on. Repeat that small change over years, and boom, entire continents frozen.
That’s compounding in nature. A subtle start snowballs into monumental impact.
From pennies to powerhouses, the Buffett blueprint
Let’s talk Warren Buffett. The man, the myth, the investing maestro.
Today, he’s worth over $100 billion. It must be because he’s a genius investor, right? Sure, he’s brilliant, but that’s not his real secret.
Buffett started investing at age 10. And here’s the kicker: over 95% of his wealth came after his 65th birthday. Why? Because he gave compounding the one thing it craves.
TIME
If Buffett had retired at 60, we likely wouldn’t know his name. His brilliance wasn’t just in earning strong returns, it was in doing it for eight decades. That’s the superpower.
It’s Not the Rate. It’s the Runway.
Too many people obsess over maximizing returns. They chase the highest gains, the flashiest trades. But the true magic isn’t in trying to leap forward, it’s in starting early and sticking with it.
Because wealth doesn’t come from how much you earn in a single year. It comes from how long your money gets to work.
Imagine two friends
Sam earns 12% annually for 10 years, and Alex earns just 7% annually… but for 40 years.
Spoiler alert: Alex wins. By a mile. That’s the unglamorous, explosive beauty of compounding.
A Snowball Named Desire
Warren Buffett once described compounding like a snowball rolling downhill. People focus on the slope, the steepness, the speed. But what really matters?
The length of the hill.
The longer your money rolls, the more snow it collects. Start at 20 instead of 30, or 30 instead of 40, and you gift yourself an extra stretch of slope. That extra time? That’s your fortune in the making.
The Hot Dog That Was Worth $1,000
When Chris Davis was 13, he asked his grandfather for a dollar to buy a hot dog. Instead, his grandfather gave him a life lesson. He told young Chris that if he invested that dollar at the right rate, it could one day be worth $1,000.
Then he asked, “Is that hot dog worth a thousand dollars?”
Yes, we all need hot dogs (or something tastier). But the story reveals a profound truth: every dollar you spend today is a potential fortune tomorrow.
It’s not about deprivation, it’s about perspective.
So Why Are You Waiting?
If there’s one thing we can agree on, it’s this. the best time to start investing was yesterday. But the next best time?
Right now.
You don’t need a massive salary. You don’t need a financial degree. You just need time and consistency. The earlier you start, the longer the hill, and the bigger the snowball.
No one remembers the dollar you didn’t spend. But your future self will thank you for the small investments you made today. Add to that a little Tax free benefit or a delayed tax strategy and your future looks even brighter.
Start small. Start now. Let your dollar become your snowball.
Because compounding isn’t just math—it’s a mindset.
Why patience pays & how staying invested beats market timing every time
Why patience is one of the most powerful investing tools you have
We all set financial goals. We plan for the future, work hard, and try to make smart choices. But sometimes, when it comes to investing, the smartest choice is to do absolutely nothing.
Yes, nothing. That may sound strange, but in turbulent markets and currency fluctuations, staying calm and staying put is without doubt the best course of action.
Let’s talk about why our emotions can sometimes get in the way of smart investing, and how a little patience can go a long way toward helping you reach your financial goals.
“Far more money has been lost by investors trying to anticipate corrections, than lost in the corrections themselves.” – Peter Lynch
Why we’re wired to react and why that can hurt your investments
Our brains are designed to keep us safe. Thousands of years ago, that meant reacting quickly to physical threats. Today, that same fight-or-flight instinct kicks in when we feel our money is at risk like during a market drop.
Your heart races. You feel like you need to do something. But acting on emotion, like panic-selling your investments can hurt your long-term returns.
Jason Zweig, a respected financial journalist and author of Your Money and Your Brain, says the three most important traits an investor can have are: independence, skepticism, and emotional self-control.
Emotional self-control means staying steady, even when markets feel shaky. And that takes practice.
Market drops happen but so does recovery
“Though tempting, trying to time the market is a loser’s game. $10,000 continuously invested in the market over the past 20 years grew to $63,636. If you missed just the best 30 days, your investment was reduced to $11,484.1” – Christopher Davis
Here’s something to remember: markets always go up and down. Volatility is normal. In fact, there’s never been a year without some level of market uncertainty.
Trying to predict every rise and fall? That’s exhausting and it usually doesn’t work. What does work is staying invested through the ups and downs.
Warren Buffett — one of the world’s most successful investors — famously said: “Investing is simple, but not easy.” What he means is, the idea of staying in the market long-term is simple to understand. But emotionally, it’s hard when prices are falling.
Benjamin Graham, Buffett’s mentor, put it like this: “In the end, how your investments behave is much less important than how you behave.”
Your mindset matters more than market movements.
The Power of Patience
Patience is one of the most underrated investing skills.
If you can resist the urge to constantly check your portfolio, or to make big changes when the market dips, you’ll likely come out ahead. Why? Because of something called compounding where your investments grow, and then those gains also grow over time.
It’s a slow build, but the rewards are big if you let time do its thing.
So, What Can You Do (or Not Do)?
Here are a few simple but powerful habits to help you stay patient and on track
Stick to your plan. A good investment plan is built for the long haul. Trust it and the people helping you manage it.
Expect ups and downs. Markets are always moving. Accepting this can help you stay calm.
Focus on time in the market, not timing the market. You don’t need to pick the perfect moment you just need to stay in.
Know the difference between fear and facts. If markets drop on emotion (fear), don’t act on impulse. But if something fundamental has changed (like your income or life situation), that’s worth reviewing.
And remember this quote from Ethan Hawke’s Rules for a Knight – “There is a moment for action, and with a clear mind that moment is obvious.”
Sometimes, the best action is no action at all.
“The stock market is a device to transfer money from the impatient to the patient.” – Warren Buffett
Impatient investors tend to make poor decisions. Buying or selling at the wrong time, checking their accounts too often, reacting to headlines instead of facts.
But patient investors? They keep going. They focus on the long-term. And they’re the ones most likely to see real results.
So if the markets feel scary right now, take a breath. Step back. Talk to your financial advisor if you need reassurance. Then simply stay the course.
You don’t need to react to every market move. You just need to stay invested and stay patient.
Image by Gerd Altmann
Why over-contributing to your retirement fund might be the smartest money move you’re not making
Well, there is and it’s called making over-contributions to your retirement fund.
You might be thinking, “Wait, isn’t there a cap on how much I can contribute?” Yes, there is, but here’s where it gets interesting.
First, a quick retirement investing refresher
What Are Over-Contributions?
South African taxpayers can deduct up to 27.5% of their income (capped at R350,000 a year) when contributing to a retirement annuity, pension, or provident fund. But… and here’s the key, you’re allowed to contribute more than that, you just won’t get the immediate tax break for the excess.
These extra contributions are what we call over-contributions.
Let’s say you earn R2 million a year and put R600,000 into your retirement annuity. You can only deduct R350,000 for tax purposes this year. So what happens to that extra R250,000? It becomes an over-contribution and it can do a lot more for you than you might expect.
So, What Happens to These Over-Contributions?
Good news, they’re not lost, and you don’t get punished for going above the limit.
In fact, SARS keeps track of them and lets you claim the benefit later, either when your income allows more deductions in future years or when you eventually retire or withdraw from the fund.
In the meantime, those over-contributions are still growing tax-free inside your fund.
It’s like putting money into a vault that;
Can’t be taxed right now and grows quietly behind the scenes and will give you tax relief later (when you’ll really appreciate it)
Why This Strategy Can Be a Game-Changer
If you’re serious about building wealth and saving on tax, over-contributing can be a smart long-term play. Here’s how it can help you:
1. More Tax-Free Income in Retirement
When you eventually take a lump sum from your retirement fund, any portion that comes from your over-contributions is tax-free. Yes, you read that right.
And when you start receiving your monthly retirement income (from the two-thirds you annuitise), those over-contributions help lower the taxable portion. That means more in your pocket every month.
2. Asset Protection
Retirement funds are protected from creditors. So if you’re a business owner or have financial risks, over-contributions help safeguard your wealth in a legal, tax-smart way.
3. Built-In Discipline
You can’t access retirement funds before age 55 (unless it’s under very specific conditions). Over-contributing can help you lock away money for the long haul, avoiding the temptation to dip into it.
4. Estate Planning Perks
If you pass away and have over-contributions left in your fund, they can be used to reduce the tax your beneficiaries pay on any lump sum they receive. That means more for your loved ones, and less for SARS.
A Few Things to Keep in Mind
Before you start shifting money around, here are a few important reminders.
No Immediate Tax Break
You won’t get the tax deduction this year, but that doesn’t mean it won’t benefit you in future. Think long-term gain, not short-term relief.
Liquidity Matters
Once that money’s in your retirement fund, it’s pretty much locked in. Make sure you’re also keeping enough cash aside for emergencies or more flexible investments like taking advantage of market dips and uncertainty that sees the market make a significant contraction. (“where there is uncertaintly, there is opportunity”)
Keep Good Records
It’s vital to track your contributions and make sure SARS reflects them accurately. Over-contributions must be reported correctly on your tax return. Misreporting can lead to disallowed deductions or penalties.
Your retirement fund should issue an IRP5 or IT3(f) form showing your total contributions (split into deductible and non-deductible). Double-check it every year for accuracy.
Should Everyone Over-Contribute?
Not necessarily. This strategy can be hugely beneficial for;
- High-income earners
- Those looking to reduce estate duty or tax at retirement
- People with unpredictable income
- Investors looking to protect assets
It’s also worth balancing your retirement savings with tax-free investments, endowments, or unit trusts, depending on your need for liquidity and flexibility.
How to Implement This Strategy
Run the numbers with a financial advisor.
Consider your full financial picture. Retirement age, income, debt, cash needs, and other investments.
Create a plan to systematically over-contribute where it makes sense.
Keep your paperwork tidy and update your tax records annually.
The word “over-contribution” might sound like you’re doing something wrong. But when used intentionally, it can be one of the most powerful tools in your retirement strategy.
More money growing tax-free. More tax relief in retirement. More financial security.
Why wouldn’t you take advantage?
Thinking of making over-contributions part of your plan? Chat to an independent financial advisor who can help you make smart, tax-efficient decisions that align with your long-term goals.
Image courtesy Gerd Altmann
Adapted from this article
Offshore Endowments Explained: How Tax-Efficient “Wrappers” Work for South African Investors
For South African investors looking to grow their retirement savings tax-efficiently, offshore endowments (also called investment wrappers) offer a compelling solution. These structures combine investment growth with tax benefits, making them popular among high-net-worth individuals and retirees.
These are the fundamentals of offshore endowment wrappers
- How exactly do they work?
- What is a “wrapper”?
- What are the implications of lock-in periods?
What Is an “Investment Wrapper”?
An investment wrapper is a legal structure that “wraps” around an investment (like stocks, bonds, or funds) to provide tax, estate, or regulatory benefits.
Common Types of Wrappers are endowment policies (life insurance-based), Trusts (for estate planning), Pension funds (retirement-specific) and Offshore bonds (flexible investment vehicles)
In the context of offshore endowments, the wrapper is typically a life insurance policy issued in a tax-friendly jurisdiction (e.g., Isle of Man, Malta, or Luxembourg).
How Offshore Endowments Are Structured
Key Parties Involved
- Investor (Policyholder) – You contribute funds into the endowment.
- Insurance Provider – The offshore company that issues the policy.
- Underlying Investments – The assets (stocks, ETFs, bonds) held within the wrapper.
How It Works
- You invest a lump sum (e.g., USD 50,000) into the endowment.
- The insurer pools your money with other investors and allocates it to chosen funds (e.g., S&P 500 ETF).
- The policy grows tax-deferred (no annual capital gains/dividend tax).
- After a minimum holding period, you can withdraw funds (sometimes tax-free).
Tax Benefits of Offshore Endowments
- No Annual Dividend/Capital Gains Tax – Unlike direct investments, growth inside the wrapper is not taxed yearly, it is only taxed upon withdrawal (if applicable).
- Favorable Withdrawal Tax Treatment in some jurisdictions. Some jurisdictions (e.g., Isle of Man) impose no local tax on withdrawals.
- South Africa taxes withdrawals as income (not capital gains), but only after the lock-in period.
Estate Planning Advantages
- Some policies allow nomination of beneficiaries (avoiding SA estate duty).
- In certain cases, payouts bypass probate (faster inheritance).
Lock-In Periods Explained
What Is a Lock-In Period? – A lock-in period (or “surrender period”) is the minimum time you must hold the policy before accessing funds without penalties.
Typical Lock-In Periods
- Isle of Man – 5 years minimum lock in period
- Malta – 5 yearsminimum lock in period
- Luxembourg – 8-10 years minimum lock in period
What Happens If You Withdraw Early?
- Surrender penalties (e.g., 5-10% of the investment).
- Loss of tax benefits (may be taxed as income immediately).
Why Do Lock-In Periods Exist?
- Encourages long-term investing (aligns with retirement planning).
- Helps insurers manage liquidity risk.
Who Should Consider Offshore Endowments?
Best For
- High-net-worth individuals (min. ~R1M+ to invest).
- Retirees seeking tax-efficient growth.
- Estate planners (avoiding SA inheritance complexities).
Not Ideal For
- Short-term investors (due to lock-in periods).
- Those needing frequent liquidity.
Comparing Offshore Endowments vs. Direct Investing
| Feature | Offshore Endowment | Direct Offshore Investing |
|---|---|---|
| Tax Efficiency | Tax-deferred growth | Annual CGT/dividend tax |
| Access to Funds | 5+ year lock-in | No restrictions |
| Estate Benefits | Bypasses probate | Subject to SA estate duty |
| Costs | Higher fees (1-2% p.a.) | Lower (just brokerage fees) |
Your financial advisor will select a fund/funds that are best for your personal situation and would include. Selecting an Insurance Provider. Pick Underlying Investments (e.g., global ETFs, bonds). Fund the Policy (via forex transfer, max R10M/year with tax clearance).
Hold for Lock-In Period (5+ years).
Risks & Considerations
- Currency Risk (if policy is in USD/EUR).
- Provider Risk (choose a reputable insurer).
- SA Tax Compliance (must declare foreign assets).
Risk appetite would depend on what stage of your retirement investing cycle you are in, what age you are and what immediate and future needs you may have.
Final Verdict: Are Offshore Endowments Worth It?
Yes, if: You want tax-deferred growth, can commit to 5+ years, and have significant capital.
No, if: You need short-term access or prefer lower-cost options like ETFs.
If you think a wrapped endowment is something you would like to add to your existing retirement planning, talk to your financial advisor who will engage a forex investment expert. Compare providers and consider partial diversification (mix of endowments + direct investments).
Should You Move Your Retirement Funds Offshore? Pros and Cons for South Africans
As a retiree or someone nearing retirement in South Africa, you may be concerned about the stability of your hard-earned savings. With global economic uncertainties—such as potential Trump tariffs, fluctuating exchange rates, and local market volatility—many South
South Africans are asking, Should I move my retirement funds offshore?
While offshore diversification can offer protection against a weakening rand and local economic risks, it also comes with challenges. In this article, we’ll explore the pros and cons of moving retirement funds offshore, the legal considerations, and how to make an informed decision. This is not to be construed as financial advice. Your investment decisions should be guided by your financial advisor with consideration to your personal financial plan. By all means refer to this article when chatting to your financial advisor.
Why Consider Offshore Investments for Retirement?
Protection Against Rand Volatility
The South African rand has a history of sharp fluctuations, often influenced by global trade policies, political instability, and commodity prices. If the US reinstates aggressive tariffs (as seen during Trump’s presidency), it could weaken the rand further, reducing your purchasing power.
Pro: Holding assets in USD, EUR, or GBP can act as a hedge.
Con: If the rand strengthens unexpectedly, your offshore gains may shrink when converted back.
Diversification Away from SA-Specific Risks
The JSE is heavily weighted toward mining, banking, and retail, making it vulnerable to local economic downturns. Offshore markets (e.g., S&P 500, global bonds) provide exposure to different sectors and economies.
Access to Stronger Growth Markets
Some of the world’s best-performing companies (Apple, Microsoft, Tesla) are listed overseas. By investing offshore, retirees can tap into faster-growing industries like tech, healthcare, and renewable energy.
Pro: Potential for higher long-term returns.
Con: Requires research or a financial advisor to pick the right funds.
The Risks and Challenges of Moving Retirement Funds Offshore
Exchange Control Regulations
South Africa has strict forex rules under the South African Reserve Bank (SARB). Retirees can legally move up to R11 million per year (R1 million single discretionary allowance + R10 million via a tax clearance certificate).
Pro: Legal avenues exist for offshore diversification.
Con: Paperwork and tax compliance can be complex.
Currency Risk
While a weaker rand boosts offshore returns, a stronger rand could reduce them. Retirees must decide whether to keep funds offshore indefinitely or bring them back later.
Pro: Long-term dollar-based investments often outperform the rand.
Con: Short-term currency swings can be unpredictable.
Higher Costs & Tax Implications
Platform fees, foreign taxes, and management costs can eat into returns.
Dividends and capital gains may be taxed differently abroad.
Estate taxes in some countries (e.g., the US) can be high for non-residents.
How to Move Retirement Funds Offshore Legally
Option 1: Use Your R1 Million Annual Discretionary Allowance
Easiest method – no tax clearance needed.
Best for smaller, gradual transfers.
Option 2: Apply for a Tax Clearance Certificate (Up to R10 Million)
Requires SARS approval.
Useful for lump-sum transfers
Option 3: Invest via Local Asset Swappers (ETFs, Unit Trusts)
Many SA investment platforms offer rand-denominated offshore funds (e.g., Satrix MSCI World, Ashburton Global 1200).
No need for direct forex transfers.
Option 4: Emigration (Financial Emigration Route)
If permanently leaving SA, you can withdraw retirement annuities early (subject to tax).
Complex process—best done with a financial advisor.
Alternatives to Full Offshore Transfers
If moving large sums offshore feels too risky, consider partial diversification:
Keep 50-70% in SA (property, high-dividend JSE stocks).
Allocate 30-50% offshore (global ETFs, US bonds, international property).
Final Verdict: Should You Move Retirement Funds Offshore?
However you look at it and whatever you decide, using a certified financial planner from a reputable firm is the first stop to getting reliable advise.
Yes, if…
You want to hedge against rand depreciation.
You’re comfortable with long-term, diversified investments.
You’ve consulted a tax specialist or financial advisor.
No, if…
You need immediate liquidity (offshore investments can take time to access).
You’re unfamiliar with global markets (risk of poor investment choices).
You can’t afford additional fees and taxes.
The final word
Moving retirement funds offshore can be a smart defensive strategy for South Africans, especially amid global trade uncertainties like Trump’s potential tariffs. However, it’s not a one-size-fits-all solution—consider your risk tolerance, financial goals, and tax implications before making a move.
Next Steps:
- Speak to a certified financial planner.
- Research low-cost offshore ETFs (e.g., Vanguard Global Stock Index).
- Monitor exchange rates and global trade policies for timing opportunities.
Banks & branches that have home affairs branches
For retired people who need to renew passports or get the new ID cards, the idea of going to a Home affairs branch and waiting in endless queues is a daunting task. Firstly the home affairs offices are not that easily accessible, parking is a problem and well, some f us simply cannot walk the distances from parking to offices.
Thankfully there has been a deal struck between Home Affairs and the Bans that effectively places a home affairs branch inside some baks. It’s not all bank branches so check the list below of banks that offer home affairs services You will find the bank, the branch, it’s address and tel number below.
You must be a customer of the bank in order to access the home affairs services. You dont need to bank with that branch just be a Bank customer.
There are many perks to being over 60 years old including being able to access pensioner discounts, jump the queues at voting stations and thankfully Jumping the queues at bank home affairs branches. Although it is not cast in stone, always ask, it could make a big difference to the wait.
Banks with home affairs branches
I have personall used the FNB branch on Fredman drive to renew a passport and it was an entirely painless experience. I didnt ump the queue and found the process very well managed with help always at hand. It took two and a half weeks from appointment to receiving the passport.
Step 1: Register for an ehome affairs account >>
Step 2: Book your appointment and make payment
Step 3: Attend at branch on the date and time, confirm biometrics (no physical photos are required, they are captured electronically at the branch)
Step 3: Collect your new smart ID or passport in a few weeks time. You will be notified by SMS and email.
A branch visit, be it at a home affairs office or bank branch (see participating branches below) is mandatory to capture and\or verify your biometric details, i.e. photo, fingerprints and signature.
Absa bank branches with home affairs offices
Centurion Lifestyle Centre
Shop 36 cnr Lenchen and Old Johannesburg Road
Centurion Lifestyle Centre
Centurion
Tel: 066 460 0356
Key West Krugersdorp
Cnr Paardekraal Drive & Viljoen Street
Krugersdorp
Tel: 079 900 6457
Gqeberha (Port Elizabeth)
682 Cnr. Bagshaw & Govan Mbeki Avenue
Gqeberha Central
Gqeberha
6001
Tel: 079 900 6457
Sandton City
Sandton City
Cnr Rivonia Road & 5th Street
Sandton
Tel: 066 290 3314
Stellenbosch
Oude Bloemhof Building
Cnr Plein & Ryneveld Streets
Stellenbosch
Tel: 021 809 2311
Towers Norh JHB Central
Cnr Commissioner & Troye St
City and Suburban
Johannesburg
Tel: 011 350 4111
Discovery bank branches with home affairs offices
Discovery Bank Head Office
1 Discovery Place,
Cnr Rivonia Road & Katherine Street
Sandton
Tel: 086 099 8877
FNB bank branches with home affairs offices
Burgersfort
Dirk Winterbach Street
Burgersfort
Tel: 072 457 8619
or 013 216 0098
Centurion Lifestyle Centre
Centurion Lifestyle Centre
Centurion
Tel: 066 460 0530
Or 012 653 2661
Cornubia
Cnr N2 Highway & M41
Durban
Tel: 031 308 7900
Glen Shopping Centre
Orpen Rd
Glenvista
Tel: 072 457 8619
or 013 216 0098
Greenpoint
Somerset Road
Greenpoint
Tel: 087 345 6090
Lynwood
Cnr Simon Vermooten & Lynnwood Rd
Equestria Pretoria
Tel: 066 460 0130
Investec bank branches with home affairs offices
Investec Bank Sandown
Sandown
Sandton
Tel: 011 286 7000
Nedbank branches with home affairs offices
Arcadia
Beatrix Street
Pretoria
Tel: 066 460 0122
Constantia Kloof
Constantia Kloof
Roodepoort
Tel: 011 639 4208
Durban North
Durban North
4051
Tel: 080 055 5111
Nelspruit
Cnr Samora Machel and Madiba Drive
Nelspruit
Tel: 081 336 5941
Rivonia
Sandown
Sandton
Tel: 066 290 3257
St George’s Mall
St Georges Mall
Cnr Riebeeck Street
Cape Town
Tel: 080 055 5111
Standard bank branches with home affairs offices
Canal Walk
Canal Walk Shopping Center
Century Blvd
Century City
Tel: 021 529 8216
Centurion
Centurion Lifestyle Centre
Centurion
Tel: 012 671 4042
Jubilee Mall
Cnr Jubliee & Harry Gwala Road
Temba
Hammanskraal
Tel: 011 351 7814
Kathu Mall
Hendrik Van Eck Street
Postmasburg
Tel: 053 723 9610
Killarney Mall
Killarney Mall
Riviera Rd
Killarney
Johannesburg
Tel: 011 486 0002
Kingsmead
Durban
Tel: 031 308 7900
Mitchell’s Plain Promenade
Mitchell’s Plain
Cape Town
Tel: 086 012 3000
Newton Park Gqeberha
Newton Park
Gqeberha (Port Elizabeth)
Tel: 041 404 8319
Simmonds Street JHB
Selby
Johannesburg.
Tel: 011 631 1624
Or 011 639 4205
How to apply for a bridging loan against your pension or provident fund
Pension fund bridging finance lenders advance a portion of the expected payout to help cover immediate financial needs. The bridging finance industry is often high risk which means the terms are going to be favourable to the lender with a high cost of lending in the form of interest rates as well as fees. These are never meant to be long term loans but delays and rejections are possible.
How to apply for a Bridging Loan against a Pension Payout
The safest way to ensure you do not incur any unnecessary fees or interest is to ensure that your pension fund has approved your claim and is in the process of payout before you apply for the bridging finance. This lessens the risk and you will be able to reasonably anticipate how long you will need before you can pay back the loan.
Application process
Check with your pension administrator for estimated payout timelines.
Find a Bridging Finance Company
Look for lenders that specialize in pension bridging loans. These are specialist companies that deal with bridging loans and would typically also provide pridging loans against assets like homes or other valuables like Gold coins or other expensive items that are easy to liquidate.
Interest rates for bridging loans can be high, so compare the offers from different bridging finance providers. The very nature of these lenders is to provide answers quickly, so you should be able to get a few offers in a very short space of time if you have all of the information and required documents ready.
Understand the repayment terms and fees
Read the terms and conditions and be sure that you understand what the additional costs and fees are should there be a delay in the payout, a payout refusal or any other specifically mentioned circumstance.
Provide Required Documents
- ID document (South African ID or passport)
- Pension fund confirmation letter (proof that funds are due)
- Bank statements
- Proof of residence
These are the basic documents required. Requesta complete list of required documents from each lender.
Loan Approval & Payout
Once approved, the lender advances a portion of your expected pension payout. The amount depends on the lender’s policy and how much you are due to receive which is calculated as a percentage of the payout amount while factoring in the risk.
Loan repayment
One of the documents you sign will allow the lender to be repaid directly from your pension payout once the fund is released. If there are delays in your pension payout, additional fees may apply. It is critically important to understand what the fees are and the terms and conditions are.
Only use a registered lender, In South Africa, the Financial Sector Conduct Authority (FSCA) is the statutory body responsible for registering pension fund bridging lenders, in compliance with the Pension Funds Act. You can check whether or not the lender is registered by visiting the FSCA website and doing a member search. This will tell you the status of the company.
Risks & Considerations
High-interest rates are a short term loan fact. Bridging loans can be expensive and the risk to the lender and yourself can be high. If the lender is not registered with the FSCA, the risk is amplified. There are many scammers out there, much like those in the operators in unclaimed benefits arena so be very careful who you lend money from and read what you sign. Only use registered, reputable lenders to avoid fraud.
Pension payout delays
If there’s a delay, you might owe more in interest or incur fees. Stay on top of your payout application by establishing a contact at the pension fund administrators office who is dealing with your claim. Make regular follow-up calls to ensure the process runs smoothly. In some cases additional documents may be necessary.
Bridging finance loans, especially those provided while waiting for a pension fund payout, tend to have high interest rates because of several key reasons.
Two post system loans are particularly risky and may require a tax compliance certificate.
Short-Term, High-Risk Lending
Bridging loans are meant to be short-term, often lasting only a few weeks or months. Lenders charge higher interest rates to compensate for the short duration, as they cannot earn long-term interest like traditional loans.
Uncertainty & Delays in Pension Payouts
Even if a pension payout is approved, delays are common due to administrative processes which is why it is so important to stay in contact with the fund administrators. This creates uncertainty for lenders, increasing the risk that the repayment might take longer than expected. The longer it takes, the more the lender is exposed to financial risk.
Lack of security
Unlike home loans or car loans that are secured against an asset, pension bridging loans are unsecured, meaning there is no physical collateral. If the pension payout is delayed indefinitely or does not come through as expected, the lender has limited recourse to recover the money.
Niche market
Bridging loans are offered by specialized finance companies, not mainstream banks. The limited number of lenders means there’s less competition, allowing them to charge higher fees and interest rates.
Urgency by borrowers
Many people seeking bridging loans need money urgently for things like medical bills, debt repayments, or living expenses. Lenders take advantage of this urgency, offering fast approval but at a higher cost. remember this is not a bank but a short term lender whose business it is to lend as little as possible for the highest possible return.
Admin cost and legal costs
Processing a bridging loan involves legal and administrative work, such as verifying the pension payout status and structuring the repayment agreement. These costs are often passed on to the borrower through high fees and interest rates.
What interest rates will I be charged for a bridging loan
Interest rates can range from 3% to 10% per month, depending on the lender and the perceived risk. It is important to provide proof of where in the process your payout is and proof that you are in a sound financial position who may just need some emergency money. Your credit score will count here.
Some lenders also charge admin fees, initiation fees, or early settlement fees, further increasing the cost. Again, read the documents you are signing, understand what they mean and if you are unsure, ask the question, in an email or message that can be used if necessary.
Image credit Gerd Altmann