A couple of mundane issues today….
Firstly, a reminder that if you wish to do a top up into your Retirement Annuity with the aim of reducing your taxable income for the 2023 tax year, we should make sure the funds are reflecting in the asset manager’s bank account by the 27th February. Which is a Monday – so Friday the 24th would be even safer.
A top up would be if we haven’t contributed the maximum of 27.5% of our taxable income over the year either through debit orders and/or additional lump sums, but up to a total maximum of R350,000 for the tax year. One also has to have the cash flow to cope with adding something. In reality, if you pay income tax at 30%, for example, you would be paying in R100 to save R30. Another way to look at it is, you either pay the extra R30 in tax, or R100 into your retirement annuity, the wealth of which you are keeping in the end. But you needed the extra R70 in your cash flow to pay it.
Secondly… many of you have asked me over the years what happens if I don’t make it across the highway one day. We – Financial Advisors like myself who are not large corporate entities that don’t die – have to have an agreement in place which entails a Succession Plan to cater for such an event. For ten years now, I have had an agreement in place with a guy in Johannesburg who is a few years older than me. I began to think that it was time to try find someone significantly younger than me, someone who might be around for a while to come. This was not all that simple seeing as the average age of the IFA is still around my age.
However, after speaking to my investment consultants and looking around at colleagues, I have managed to find someone down here in my area who is 12 years younger than me, part of a small two-man independent business, works with the companies I work with and appears to work in a similar way to me. I like the chap and so went ahead and signed a new succession agreement with him this week. What would actually happen if that highway day came along, is that Jacki has to submit this agreement to the companies I use, they are supposed to transfer my business across to David (his name), then Jacki has to tell you all that I’m no longer around and that my recommendation is for David to help you. However this is optional from your side and you’d be entitled to find someone else. David has clients in KZN, up in Johannesburg as well as in the Cape. So he travels around too, which is nice for my Johannesburg clients.
So that’s all sorted again.
That’s it for today.