Tips to save on personal investments

In light of the volatile market as a result of the National Prosecuting Authority’s recent announcement to charge Finance Minister, Pravin Gordhan, consumers are urged to review their personal investments and policies to ensure continued financial security.

This advice came from senior manager at Standard Bank Advisory Propositions, Errol Meyer, who encouraged consumers investing to also take advantage of recent the Taxation Laws Amendment Act, 2015, which created an opportunity to significantly enhance saving for retirement.

The act enables the tax harmonisation of retirement fund contributions and benefits as well as increases the threshold for annuitisation from R150 000 (in the 2013 legislation, the Tax Laws Amendment Act No 31 of 2013) to R247 500 while closing certain coverage gaps in the 2013 legislation.

“Ultimately, building financial security and wealth is about taking a long-term view; markets tend to be cyclical and move up and down in periods that vary. Overall, however, they do correct,” he said.

“What is important, however, is that, when external circumstances change, that you take the time to assess where your investments are, how they are performing and whether they still meet your needs.”

He then went on to offer consumers advice on how best to spring-clean insurance according to their needs.The first was to review policies annually as life circumstances often changed every year and it remained important to ensure policies were up to date with these changes.

“Another tip is to choose the right policy, and this means understanding the different products because choosing the wrong one can mean you don’t get paid out for certain claims and, therefore, incur major costs or retire with inadequate income to replace your salary,” he stressed.

He also urged those investing to avoid cancelling policies, even as a cost-saving exercise, as circumstances and the cost of living often changed the older one got.

Meyer concluded by encouraging consumers looking to invest to get a financial planner, especially in light of challenges faced economically, to help plan ahead financially. “Having a planner can often help clients plan for the future, rather than just for the short term, and can help build an ongoing relationship of trust,” he said.

Read: Consumers schooled on benefits of collective savings

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