Getting married is not quite as simple as saying “I do”. There are many legal and financial aspects to be considered. Combining your long-term financial goals may be a daunting task and considering a few simple aspects can ensure a smooth sailing.
Ensuring that both are on the same page about finances and their responsibilities before getting married might be the best decision you can make for your new life together.
Getting married comes with a variety of challenges and ensuring a sound financial plan before entering your lives together will ensure for more time to focus your building a future together.
Wills – Having an updated will is an important part of ensuring your spouse/family is taken care of, even if you think you do not have enough assets to justify a will.
Update your beneficiaries – Ensuring that your spouse is your beneficiary on any insurance or retirement funds you may have, will ensure a better financial position for them, should you pass away.
Insurance – Consider combining your medical insurance, vehicle insurance, life insurance, etc. as this might ensure a cheaper joint premium. Include this discussion in your budget, as you should determine who will be responsible for paying these premiums.
Married in Community of Property – By choosing this regime, both spouses have an equal share in each other’s assets and liabilities held before and after marriage. Both may act individually of the other, although written consent is needed from both parties when acting with regards to fixed property and credit agreements.
Out of Community of Property with the application of the Accrual System – In this matrimonial regime, each spouse comes into the marriage with their own assets and liabilities. By death or divorce, any assets and liabilities of both parties obtained during the marriage are divided equally. This is referred to as the accrual.
Each spouse comes into the marriage with their own assets and liabilities, hold control thereof and is responsible for the individual finances. One spouse has no legal say over the financials of the other and each spouse may enter into transactions and build their own estate without the consent of the other.
Getting married in South Africa without an antenuptial contract, you will automatically be married In Community of Property and will only be able to amend this by applying to the High Court. Entering into an antenuptial contract without specifically excluding the accrual, it will automatically apply to your marriage.
After years of hard work, we all want to retire comfortably. The importance of investing sufficiently to achieve your post-retirement income goals, cannot be emphasised enough.
When you are saving for retirement in your private capacity, ask yourself if you are saving enough. Are you saving at least 15% of your salary? The percentage you need to save gets bigger the later in life you start. Ideally, you should retire with approximately 75% of your monthly income, this is known as the Net Replacement Ratio.
Providing for retirement can be done using several different vehicles, your financial advisor will help you determine the combination of which will be most suited to your needs:
Planning for retirement can be a relatively straight-forward process with the expertise of readily available financial advisors.
If you are part of an employee pension- or provident fund, ask yourself if you know the rules of the fund you are invested in. What does it mean for YOUR retirement?
No matter where you are in life, you can take meaningful steps toward your retirement and it is never too late to start. That being said, saving for retirement is not something that should be left for the last minute. Start saving today.
Owning residential property forms part of many South Africans’ goals. Buying a house is a weighty undertaking and several factors should be considered to determine if you are financially ready.
Saving for a home loan is the first vital step in becoming a homeowner. It is unlikely that the banks will give you a 100% home loan. You will need to save up for a deposit of between 10% – 25% of the value of the home you intend to purchase.
Although no one can be 100 % sure of job security, buying a house is not advised when your source of income is not, at least, relatively secure.
Building up a larger deposit and/or emergency fund is a good idea if your earning prospects are a little uncertain.
When choosing the location to buy property, experts believe the following considerations will make your decision easier:
Although counter-intuitive, there are circumstances when it would be better to rent than to buy. This is not an exhaustive list, but a few of the circumstances in which you should rather lean toward renting:
Embarking on the journey of starting a family is exciting, it may also be one that is filled with anxiety and ambivalence. Your time and finances are about to be stretched to the maximum but do not let fear and uncertainty about the way forward keep you from acting.
As you shower your new baby with love and attention, remember that financial security is one of the most loving gifts you can give.
Thorough financial planning will ensure your transition into parenthood, can be made with a little more ease.
Preparing for the arrival of your little one may be an enormous task, but it is never too early to start saving for their education. Even before they are born, start laying the foundation and prepare for your child’s future.
Give them a chance at the life they deserve.
As parents, we take care of our child/children’s every need from birth into adulthood. Wanting the best for our children comes naturally and saving for their education is a noble undertaking while we simultaneously invest in their future success. To provide sufficiently for tertiary education, you should start saving today.
It is crucial to determine what “sufficient” means when saving for education. This is where financial planning plays a vital role.
Carefully considering any job offer you receive and weighing the full value of your total benefits package can help ensure you make a career move that will keep you happy for years to come.
Salary may be the first thing you think about once you’ve landed a job offer, but the total benefits package is what you should consider.
The following may or may not be included in the package being offered and you should compare it with what you have before taking the new job:
Ask whether your employer offers a retirement fund. Inquire about your monthly contributions as well as that of the employer. You need to familiarise yourself with the investment funds within the retirement product. An employer retirement fund is a great added benefit, but be sure you understand the details of your fund, keeping your retirement goals in mind.
Insurance offered through your company often gives you the benefit of lower group rates along with employer subsidies. It is, however, important to remember that many, if not all, of these benefits, are employment-bound. You will not enjoy the cover thereof should you leave the service of the company.
Does your offer include any kind of bonus? If so, think about how to best use that extra money for things like retirement savings or funding a child’s education.
Whether in the form of stock options, profit sharing or an employee stock purchase plan, the ability to acquire company stock may provide you with an investment opportunity that could add considerable value to your total compensation.
When you accepted a new job offer, and leave the service of your employer, your transferable benefits will need to be moved too.
The market value of the retirement fund is yours, and you have a few options when deciding what to do with them.
Some of those options include:
Contact a financial advisor to find the most suitable option for you and to help you understand the taxation implications that could affect your decision.
When you change jobs, it is advisable to research insurance options as you make your job transition.
Starting a business can be a very demanding time in your life and career. You are working hard to make your dream a reality and you have a lot on the line. Autus can help you take small manageable steps so you maintain sight of the important things, like laying down the foundation and establishing your business while protecting what you’re working so hard to build.
In the event of the unforeseen or unthinkable happening, you can benefit a great deal from having the appropriate business and personal insurance. Protecting your business from your premature death, sudden illness or injury is very important. Life insurance and disability insurance can help ensure that your hard work and investments are protected if something happens to you or key persons in your business.
Providing employee benefits can help you attract the talent you need. One of the top challenges that we face today is recruiting qualified employees.
Retirement plans force employees to save towards the golden years of retirement. In a country where less than 6% of the population can retire without government aid or assistance from family, this is a great added benefit for employees.
Life insurance and disability insurance can help ensure that your employees enjoy the protection they need against an unexpected event.
You work hard to create the life you desire. Protecting your standard of living should thus be a priority. Being unable to earn an income due to illness or injury, whether temporary or permanent, can place your assets at risk. We can help you set up a strategy to provide for current and future financial needs.
Life insurance is a means of ensuring that your family is financially secure in the event of your untimely passing.
If you are married, have children, or own your own business, you should consider life insurance to make sure your family is taken care of when you are no longer around to do so.
Disability cover pays out a predetermined amount in the event that you become disabled.
When considering disability cover, care should be taken to identify your exact needs and the amount required to financially maintain your standard of living.
Critical Illness and Dreaded Disease, usually refer to medical conditions that are life-threatening, such as cancer, heart attack, stroke, multiple sclerosis, and the like.
Not all insurers provide cover for the same conditions, so it is important to consult a financial advisor to determine the appropriate product for your needs.
Allow us to assist you in providing protection for your assets and income:
In the current economy, many companies are retrenching people as they cannot afford the keep them on. Unfortunately, it can happen to you when you least expect it and the financial impact can be debilitating if you have not made contingency plans.
It varies according to your employment contract, go through your contract and make sure you know what is due to you.
Prioritise and cut back – cancel unnecessary subscriptions and expenses, and create a list of the top things you cannot go without.
Consider starting a savings plan with a regular monthly debit order to cater for the unforeseen or unexpected.
Inform them of your change in situation, as it may affect your ability to pay back any loans. Make the necessary arrangements to protect your credit record.
It may seem counter-intuitive, but it is a good time to re-brand and market yourself. Speak to friends, family and co-workers, they may know of work- and/or business opportunities for you to pursue.
If you contributed while you were working, you are entitled to claim from the Unemployment Insurance Fund should you be retrenched.
Going through a divorce is said to be one of the five most traumatic life experiences. The familial, emotional, and financial concerns during this time may be overwhelming. Surrounding yourself with the right family, friends, and certain professionals can make all the difference.
We would like to offer our services in planning for your long-term financial well-being.
During your divorce, you may consider:
There is no legal rule that states you must employ an attorney to process a divorce. If you are young, with no children and have little in the way of assets you probably would not need one.
For couples with joint financial interests and/or children, it is generally wise to hire an attorney to safeguard your financial interests.
Child support and alimony payments are often conditions of a divorce. Whether you are making or receiving the payments, be sure you understand all the implications.
Many life insurance issues revolve around whether you are granted custody of the children. For instance, it’s often up to the custodial parent to make sure the life of the noncustodial parent is insured — this ensures that children continue to have financial support if a parent dies. If you are the custodial parent and are receiving child-support payments and/or alimony, you can purchase a life insurance policy on your ex-spouse. If, for some reason, you cannot obtain new insurance, have his or her existing policies transferred to you as the new, outright policy owner or irrevocable beneficiary. You can include this provision in the divorce agreement.
Many divorces specify that whoever provided health coverage for the family during the marriage must continue to provide it after the divorce. Some group policies may routinely allow continued coverage for the family even after divorce.
A non-member spouse can have a claim on their spouse’s pension fund as stipulated by the divorce decree. This amount may be paid out or transferred to another fund.
Remember to update your retirement plan beneficiaries.
Care for those who cared for you.
Your parents spent years taking care of you. There may come a time when you need or want to return the favour.
Understanding how elder care can affect your lives will help you feel make informed decisions about their health, happiness, and wellbeing. Preparing ahead of time for the care of your ageing parents will help you protect your and your parents’ finances giving all parties involved more options to sustain their quality of life.
In order to protect your own and your parents’ interests, there are some legal steps that need to be taken in preparation for the time when they may be needed. While it may be difficult for parents to share and plan for giving over the control of their matters, having these mechanisms in place may help you more quickly act on their behalf in the future.
These may include:
As this can be a sensitive issue, having the discussion well before the need arises can lay the groundwork and provide you with the information you may need later.
Work with your parents to establish a budget, aimed at making their assets last as long as possible.
Remember to include:
Losing your ability to earn an income due to illness or injury, whether temporary or permanent, can place great financial strain on you and your family. We can help to reduce the impact of such events through diligent financial planning.
Having the appropriate cover is paramount to the successful navigation of unforeseen life events such as disability and critical illness.
Disability insurance protects your most valuable asset, the ability to earn income over an extended period of time. It can help provide a much-needed source of income for you to manage your expenses while you are working towards recovery or replace your income should you not be able to return to work.
Even if you have sufficient medical aid cover it is wise to take out critical illness/dread disease cover.
Medical Aid schemes provide decent cover while you are in the hospital, the challenges start with your out-of-hospital expenses and medications. Critical Illness cover is generally paid out in a lump sum on diagnosis of the condition. This cash injection helps you to cover expenses like adapting your house, should you find yourself confined to a wheelchair.
The difference between disability and impairment is that the latter does not stop you from earning an income. Nowadays, impairment cover is included in disability insurance. This information is included in your policy information and as with Disability Cover, it should be tailored to your unique specifications.
During this tragic time, family and friends can provide you with much-needed love and support. For the formalities and legalities that are brought on through death, it may be advisable to involve some professionals to assist you.
The pay-out of your spouse’s life insurance is not automatic — you must file a claim. Thankfully, it’s generally a straightforward process:
It is important that you check to see if your spouse was covered under any additional policies, some of which you may not be aware.
If you’re unsure what kind of individual policies your spouse might have had, looking through old bank statements may provide you with clues.
Some companies routinely offer life insurance. Call your spouse’s employer to see if he or she was covered.
Banks, lenders and retailers arranged with long-term insurers to design an insurance product that would specifically address the instalment type debt.
In the case where your spouse co-owned a business, he or she may have entered a buy-sell agreement with their business partner(s). This agreement names the partner of a business as the beneficiary of a life insurance policy to provide means for the buyout of your spouse’s business. Consult your spouse’s business partner to find out if they had such an agreement.
We easily fall into the trap of spending the money we have left after the month’s expenses, but too often that means that we do not have sufficient funds to allocate towards saving. Whether you are saving for that big vacation, a rainy day or towards your retirement, here are a few things you should consider.
When you have a longer time horizon, it is generally accepted that one can afford to take on more risk in anticipation of achieving higher returns. A short time horizon, on the other hand, means that should markets fall, you will not have enough time left to be invested and wait for a recovery of the market.
Market timing is a strategy where an investor tries to determine the perfect time to be in the market and get out. This strategy relies on forecasting and can just as easily be wrong as it is right.
Time in the Market, allows you to ride out the ups and downs while invested in the market. You have the advantage of the time value of money and compounding interest.
People tend to use unit trusts as an investment vehicle when they want to achieve optimal diversification without the hassle of managing stocks and bonds directly, and gaining exposure to a greater variety of investments.
Share Portfolios can be tailored to an individual’s unique needs and objectives. Shares are held in the client’s name and are bought and sold on behalf of the client by an Asset Manager. The entry barriers are usually quite high and could be as much as a few million.
On all forms of investing various taxes are applicable. You may incur the following tax in your portfolio:
Ensure that your portfolio is reviewed with your financial adviser on a regular basis. As your circumstances and goals might change over time, it is important to ensure that your investments still offer the best possible solution for your individual needs.
Financial planning is an ongoing process and should be reviewed with time.
Consult a financial advisor to help you consider all the factors that influence saving and investing as well as the effect of taxation.