written by Eben Rautenbach, PSG wealth adviser

Are you happy about the decisions you made in 2017? It is easy to judge yourself on your past decisions as the outcomes of these decisions are now known. At the time when they are made though (involving different emotions and reasoning), the outcomes of your decisions and the associated risks and rewards are not yet known.

The start of 2018 offers us a great opportunity to build on the successes of the previous year or to identify new challenges. A goal for 2018 should be to get a proper financial plan in place, and in doing so create long-term wealth and peace of mind.

Maximising valuable advice

The starting point of the journey to long-term wealth will be to get professional advice on your plan, especially if investments and tax are not your fields of expertise. Make an appointment with an independent adviser and get a comprehensive financial plan together.

A good independent adviser can help you to stay the course and to make important decisions. This adviser can help manage your expectations, take stock of your financial position and manage any discomfort or regret you may experience along the way. In this way, they can help you make better long-term investment decisions. Make sure your adviser is from a reputable company, has all the necessary qualifications, is registered as a certified financial planner (CFP®) and is registered with the Financial Planning Institute (FPI).

Up your savings contributions

Increasing your contribution to your retirement annuity is one of the easiest ways to get ahead in the long run. Not only will you have a bigger post-retirement investment, you will also get a tax deduction. Investment growth is tax free, your contributions are tax deductible to a specified limit and a portion of your investment proceeds will be tax-free at retirement. A small amount extra every month could make a fundamental difference in your journey to a more comfortable retirement.

When looking at getting long-term benefits, the tax-free investment product (TFIP) can be a great vehicle to supplement your retirement savings. Although the contributions are limited per individual, no taxes are payable on any interest, dividends or realised capital gains within the TFIP. The long-term tax benefit will be enormous, especially with tax brackets getting higher.

The tax year-end

With the tax year ending on 28 February 2018, you still have an opportunity to maximise your tax savings. By contributing the maximum possible to tax deductible savings products (for instance an extra contribution to your retirement annuity), you will be able to decrease your tax bill.

The deadlines to invest these contributions are quite strict, so make sure you are aware of the dates your product provider has set to have your paperwork finalised. Management is the heart of the plan that can drive it forward. Do not let deadlines be the downfall of your journey.

Start 2018 with a budget

Let us start the journey. Sit down and think of where you want to be at the end of this year and remember that it will depend on the decisions you make today. Starting with a proper budget will be the ultimate tool showing you a bigger picture. It may not always be easy to stick to your budget, but having it will put you in a better position to potentially reach your goals.

Remember to plan holistically

Look at retirement planning to ensure a comfortable retirement. Having proper investment strategies in place will make sure you meet your investment goals and be able to pay for the unexpected. Investments will play a big role in the creation of long-term wealth and therefore need proper investment advice.

Plan for negative events too

Disaster may strike at any time, and insurance and medical aid will give great relief should that be in place. Every business wants happy customers and employees. Your employees play a big role in your success – make sure they are looked after.

Succession planning is very important if you run your own business. Planning for transfer of the business at death, illness and retirement ensures continuity in the business. Is your will in order and when was the last time you had a look at your trust deed?

For more information, contact Eben Rautenbach (PSG Wealth Bloemfontein, Deale road) on 072 958 5228 or at eben.rautenbach@psg.co.za.

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