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A South African working abroad, able to save R36 000 per month, hopeful that he will continue these earnings seeks to find the best investment strategy.
He writes:
I am South African and 61 years old, abroad and able to save approx R36 000 per month. I do not own a property and am hopeful that I could continue these earnings at least until age 65 years. Kindly please let me know the best investment/ saving strategy.
I feel quite in the dark at present. Your help and guidance is immensely appreciated!
Elian Wiener, finance and investment expert, and founder of Wealthwoke, responds:
While it is not clear if you already have some savings and investments (hopefully you do), it is clear that you are getting closer to retirement and need to ensure you save enough to be able to live out your golden years in comfort.
If you have no savings yet, the most important thing you can do right now is start. You cannot afford to delay any further. There are a number of investment vehicles available to you. Some of these, such as a retirement annuity or tax free savings account, offer tax advantages for contributions. However, they can also be restrictive in terms of where you can invest your money.
For instance, a retirement annuity has to comply with Regulation 28 of the Pension Funds Act and restricts you to a maximum offshore exposure of 30%. That could be a problem from a diversification perspective, especially if you intend to remain abroad in retirement. Given your age, its also important that you get your asset allocation correct. This refers to the percentage of your savings that you allocate to equities, bonds, cash etc.
For example, putting all your investments into equities may not be appropriate for you, as given your age, you do not have the time to wait for the equity markets to recover if they fall over the next few years.
Due to these complexities, I would really recommend you speak to an accredited and recommended financial advisor, who can help you put together an appropriate strategy that suits your specific situation.
Questions may be edited for brevity and clarity.
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