Financial tips for 2021
NEW YEAR’S RESOLUTIONS: FOR YOU, YOUR FAMILY AND YOUR BUSINESS
There is a lot to consider after the arrival of Covid-19 and its impact.
Schedule a meeting with your financial advisor to plan for the year ahead. Review your existing personal investment portfolio while considering these questions:
Are you making provision for retirement?
Are you optimising your annual tax benefits?
Do you have an emergency fund?
Do you have additional planning in place, like for the next holiday?
Are you aware of your fee structures, and the underlying funds you’re invested in? Are they suitable for your risk profi le and personal goals?
Is your portfolio sufficiently diversified to ensure a resilient portfolio?
Once your portfolio’s structured, ensure you’re saving sufficiently. You must save the correct component of your income to reach the required replacement ratio at retirement. Review this annually to adjust for inflation and income increases.
Review your risk cover. Do you have sufficient cover to protect yourself and your family?
Review your family’s and business’s financial planning:
If you’re a business owner or co-shareholder, are you covered for death, disability and illness? Have you made provision to protect your business against unplanned circumstances?
Does your co-shareholder have sufficient cover, like retirement savings, emergency funds and risk cover?
Do you need to plan for your children’s education?
Do you have an recently-reviewed, executable will that reflects your current wishes?
Do you require a trust structured in your portfolio?
Have you met with a tax specialist to ensure your holistic portfolio is structured tax efficiently and to ensure continuity planning is on track?
Do you have any debt? If so, do you have a plan to pay it off should something happen to you, while also keeping sufficient risk cover in place to replace your monthly income in the household?
Set up a budget for your family to spend income wisely.
Have you reviewed your medical aid plan? What are you and your family covered for?
Do you have gap cover?
Are you making an effort to upskill yourself in the financial/ investment world, to enable more robust conversations with your advisor and to educate your beneficiaries.
Do you have sufficient asset class diversification in your portfolio to help protect against volatility, unplanned events and market cycles?
Ensure you have sufficient offshore diversification.
Do you have sufficient provision to ensure you can take care of yourself and your family commitments on retrenchment? Are you upskilling to be in the best position for a new job offer?
Understand tax implications on withdrawals. Approach a tax specialist to do a detailed tax calculation before considering withdrawals. Preserving or reinvesting your funds on changing life events is advised.
Protect yourself against unwanted tax implications in your portfolio. Different investment vehicles have different potential tax implications. Speak to a financial advisor and tax advisor.
If you’re using your annual offshore allowances, know that every transaction adds to this.