Newsletter April 2015 - Why Financial Planning

Building a solid financial foundation is one of the most important things you can do in your life time. Speaking to your financial adviser about a financial plan is just as important as your routine appointments with your local GP. A lack of financial planning has been a key contributor to the huge underinsurance facing many South Africans. A study conducted in 2013 revealed that South Africans were underinsured by 24 trillion rand.

The insurance gap increases when income increases because more life and disability cover is needed to maintain a lifestyle should one die or become disabled. A loss of income to a household could affect an entire generation.
A good financial plan should speak to the following questions one might have:

• Will my financial plan look after the people I care about most when I am no longer around?
• Will my financial plan take care of me when life tells me I’m too old to work?
• Who will take care of me if I were to be hospitalised because of a disability?
• Who can I turn to when an x-ray reveals that I have a dreaded disease?
• Does my financial plan account for my current tax position or estate planning when I die?

If your financial plan does not address the above questions, the reality is that you may not be where
you want to be financially and you need to think about restructuring your existing plan or
implementing a new plan.

Financial planning can ensure you are better equipped to handle one of the five major problems we all may face during our life. Can one really ignore the importance of having financial planning in place?

In 2014 Liberty paid out over R3 billion rand in valid claims across all risk categories. The largest claim paid to a customer in 2014 was R50 million rand for Life Cover. This can never compensate for the loss of a loved one; it does, however, ensure that those left behind are financially secure.

Click to view Liberty’s 2014 claim stats: http://www.liberty.co.za/our-products/Documents/claim-stats-digital-brochure.pdf

Feel free to share this with people colleagues, friends and family and also remember that I’m always available to you for any queries you may have.

Tel +27(31) 514 6112  |  Fax 086 425 8820 |  

Email: Tom.Mchunu@liblink.co.za



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Newsletter March 2015 - Budget Review

This year has started off well despite a few bumps along the way. Many consumers have enjoyed the benefits in the recent price decrease in fuel, despite this being short lived by the 2015 National budget speech given by new Finance Minister Nhlanhla Nene, where he announced the levies that would be added onto the fuel price.

The question most people ask is how the National Budget Speech affects them.
For one thing income tax for individuals will go up by 1%.
Does this mean you are going to pay more tax? Yes.

However there is a simple solution to overcome that. An increase in retirement savings contribution will give more of a deduction against taxable income. Taxpayers could possibly see a decrease in tax payable to SARS by increasing their retirement savings, provided that consumers are maximising on the 15% deduction allowed against non-retirement savings income.
A tax free savings investment was introduced that allows a consumer to invest a maximum of R 30 000 per year and a maximum contribution of R 500 000 per life time, with a minimum lump sum of R 5000 and a monthly contribution of R 500 per month. This allows customers to invest and not pay tax on the growth of the investment. Clients can also access their investment anytime with no cost attached. Big thumbs up to Minister Nene “Madam Speaker”. You can find all the details you need by following this hyperlink: STANLIB Tax Free Savings Solution:
http://www.stanlib.com/newsatstanlib/Documents/STANLIB_Tax-Free_Savings_Account.pdf
Minister Nene has announced changes to the way income protection policies will be treated. Income Protection policy holders who make a claim, will receive their salary without having to pay tax on the benefit. However contributions will no longer be allowed to be claimed on the Income tax return.

The 2015/2016 tax year of assessment sees medical aid tax credits increasing to R 270 per month for the main member and first dependant - and R 181 for additional dependant(s). This is another deduction against the tax payable for those who are members of a Medical Aid Scheme.

The question you may be asking is should I be ignoring the above mentioned facts?

The simple answer is no. The way forward would be to talk to me about taking home more of what you earn and paying less tax.

Feel free to share this with people, colleagues, friends & family and also remember that I’m always available to you for any queries you may have.

Tel +27(31) 514 6112  |  Fax 086 425 8820 |  

Email: Tom.Mchunu@liblink.co.za



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