Capital Gains Tax

Compound Interest

The Road to Success

Why you shouldn't wait until retirement to travel

My New Logo

When considering my new logo, I wanted something that would embody not just what I do, but also be symbolic of the Lifestyle financial planning journey. For this, I have chosen a book, as I feel it is illustrative of many aspects of this process.

Books are traditionally symbolic of learning of knowledge and of wisdom. I believe in sharing my knowledge with my clients, assisting them in making informed choices and decisions around their financial objectives, goals and dreams. One cannot embark on a journey without a map and information about the road ahead.

A book also represents a story, the progression from one chapter to the next. This is fitting as we are all living our own story, entering into different “chapters” of our lives such as marriage, parenthood and retirement.

Books have also served as a means of communication, whereby ideas can be conveyed from one person to the next. They are accessible and can be referred to at any point as and when one requires the knowledge. This is a fundamental part of the relationship between myself and my clients as I believe in maintaining that communication and building upon relationships of trust and understanding.

It is these principles that provide the foundation of my role as a Lifestyle Financial Planner and why a book is most fitting for my brand.

The Gender Retirement Gap

Women generally are at a disadvantage compared to men when it comes to retirement planning and funding. When faced with the question “How much do I need to save for retirement?”, many women do not factor in the unique hurdles to their gender which will have a huge impact on their funding.

One of the factors that women need to consider is that they generally, on average, live longer than men. This means that they will need to make allowance for this when planning their retirement, ensuring they will have enough saved to cover for these extra years while retaining an acceptable lifestyle.

Women still, on average, earn 23% less than a man earns in the same or similar position, according to Statistics SA. This means that not only is their portion of salary they put away smaller, assuming they allocate a similar percentage of their taxable income, they also have less money to work with.

The third important factor to consider is that women often put their careers on hold to have children, sometimes for a period of years. During this time, their contributions to their retirement fund stops and they are unable to reap the rewards of compound interest on those additional funds. There is also the temptation of cashing out on Pension or Provident funds when taking this leave of absence.

The fourth and often forgotten consideration is that women returning to mainstream employment after an extended leave of absence, often re-join at a lower salary compared to having received annual increases to date.

For a woman to have the same retirement income as her male counterpart, in these circumstances, they must put away a much larger sum of money, monthly or annually but should also start contributing early on in their career, (from the first paycheck if possible) especially if they are hoping to be financially independent of their partner at retirement.

Another South African statistic is that 50% of marriages fail, which means that women may not have the benefit of the joint retirement fund. A woman should also be aware, that in the event of a divorce, the spouse should be entitled to half of the other party's fund value.

If you are a woman and wanting a stable retirement plan, here are some tips to bear in mind:
• Save and invest independently of your partner.
• Keep your retirement savings safe and avoid the temptation to dip into this fund early, when leaving a company Pension or Provident fund.
• If you want to retire at the same time as your partner but you are different ages, you will need to factor this in and ensure you are putting away enough for this to be possible.
• Pushing out your retirement date will have a significant effect on your savings. Ask your Financial Planner to show you the difference in savings between retiring at 60 or retiring at 65.
• Plan ahead and factor in possibilities like sickness and disability into your savings roadmap. Chat with your Financial Planner about safeguarding against any risks.
• Make sure that your lifestyle in retirement remains sustainable, this does not mean going to live with or off your children.

If you would like to know more or want some assistance in your Lifestyle Retirement Plan, please do not hesitate to get in touch with me.

Bitcoin And Your Will

The rise of cryptocurrencies like Bitcoin and Ethereum pose an interesting challenge to those investors and estate planners wondering what happens to their “virtual” portfolio in the event of death.

Because Bitcoin is heavily protected from hackers, there is also the risk that it will also be inaccessible for family members after one passes away. It is stored in a virtual wallet that is protected by two kinds of keys; a “public key” that allows others to send and receive Bitcoin and a “private key”, which gives the owner access to their wallet.

After the owner of the virtual wallet passes away, the only way to access the Bitcoin is with the “private key”, therefore the best way to ensure your Bitcoin does not get lost in cyberspace is to make sure a trusted person such as your Financial Planner or Attorney has access to this key. There is the option to create a multiple-signature wallet, which means that it needs at least two authentication keys to access it. One key can be given to the beneficiary set to inherit your virtual wallet and the other to a trustee, meaning that they would both be involved in accessing and distributing the Bitcoin when you pass on, in terms of “my Will”.

You should state who is responsible for this key in your Will as well as who will stand to inherit your Bitcoin in the event of your death. This will help ensure that there is no uncertainty or risk of losing this investment. It would be all too easy for someone to say, “he would have wanted me to have it” and walk away with hundreds of Rands worth of Bitcoin.

However, at this stage Bitcoin cannot be declared part of the physical assets for your Estate. Nor can they be owned and managed by a Trust due to its virtual nature and the fact that it is not recognized as an official currency.

This, like all aspects of Financial Planning, is better dealt with sooner rather than later. It is important to plan for your future and put plans into place to ensure that your assets are passed on according to your wishes.

If you have further questions about incorporating Bitcoin into your Will, please do get in touch with me for assistance.

Compound Interest and Your Retirement

About Colin

Colin Bernic has 26 years' experience in the industry, where he has gained invaluable knowledge and insight into the financial planning process. Over the years, he has built up long-standing relationships with emerging and high net-worth clientele.

Colin puts his clients' needs before the sale of product. He believes in acting ethically and with integrity. Trust is an essential part of the role Colin plays in establishing and working towards lifestyle and financial goals. He partners with his clients and is there to support and advise them throughout the journey ahead, no matter what roadblocks may be encountered along the way. He refers to this as a "Partnership of Understanding".

He provides, together with his highly experienced back office support, a comprehensive and personal service, ensuring that his clients know where they are and where they are going. Through using layman's terms, there is no risk of misunderstanding the advice Colin gives.

His expertise lies in:

• Comprehensive analysis of existing risk and investment portfolios
• Risk assessments and structuring in keeping with lifestyle planning
• Investments and wealth building in keeping with lifestyle objectives
• Retirement funding to meet lifestyle goals
• Estate Planning to minimize the effects of Capital Gains Tax, Income Tax and other duties
• Auditing of existing Trust structures using strategic alliances in the legal industry, ensuring that the deed document incorporates up-to-date legislation 
• Drafting of Wills with strategic partners

Colin is a Representative of Surefin Advisory Services, an accredited Old Mutual agency franchise.