Loading...

Retirement advice for a self-employed person

Mar 15 2016 07:21

A Fin24 user who is self-employed wants to start a retirement plan and seeks advice. He writes:

I'm 42 years old and self employed and I would like to have a retirement vehicle. Monthly I earn around R10 000 after my expenses and I would like to invest this money for retirement. Do you have any suggestion?

Johan Stadler from FNB Financial Advisory division responds:

As a self-employed client, the most suitable retirement vehicle could be a retirement annuity. This is a tax efficient vehicle for investors who wish to enjoy a certain standard of living when they are no longer employed. Contributions to a retirement annuity could either be in the form of a lump sum amount or monthly contributions.

We generally advise our clients to carefully consider their retirement goals and make financial contributions that will help them meet those goals. It is important to always consider your financial circumstances as an individual and to ensure the contribution is always affordable and in line with your goals.

As a business owner, it is even more important to consider self-funding of your retirement savings due to the fact that you may not be contributing to a company pension fund.  

You probably see your business as part of your retirement plan in the sense that you can sell it at some stage to unlock your wealth. This is not always an easy option and very often, business transfers are complicated. The future value, provided you find a willing and able buyer, is not certain.

Over and above simply considering retirement savings, we would suggest that you also consider succession planning and the impact of your business on your personal estate.

Each and every situation is unique and your personal circumstances will influence the solution that is best suited to you. We strongly advise that you consult a financial planner who will conduct a thorough needs-analysis and provide advice according to your individual goals and current financial position.

*Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

retirement  |  money  |  money clinic
NEXT ON FIN24X

 
 
 
 

Company Snapshot

#SAVINGSMONTH

Five of SA's top financial brains, including SARB governor Lesetja Kganyago share their best savings habits.
 

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Are you prepared for the latest round of Eskom’s load shedding??

Previous results · Suggest a vote

Loading...