Risk Management

Dying prematurely, becoming disabled or suffering from a critical illness are all major events that would have a substantial impact on you and your family’s financial situation. Risk planning uses a six-step process to quantify the financial impact of these events and considers appropriate methods of managing these risks. Life insurance is one of the most cost-effective methods of providing for these risks. You will have access to industry-leading products through Platinum Financial Services.

Estate Planning

Estate planning is the process of arranging your affairs so that you, your family and beneficiaries enjoy the greatest possible advantage from your estate during your lifetime and after you die, no matter when you die. You may also use estate planning to structure your estate to benefit from available tax and estate duty savings. Depending on circumstances, a good estate plan may consist of a simple will, but it may also involve intricate structures that include trusts and companies. Estate planning is an essential process that everyone should use to provide for the financial well being of their families and loved ones.

Estate planning is an important part of your overall financial planning responsibility to yourself, your family and your loved ones. Failure to attend to it may result in delays in the administration of your estate, possible double taxation, and liquidity problems in your deceased estate.

Retirement Planning

Consider the following facts and trends about retirement and ask yourself whether you’ve been making enough provision for your retirement.

According to a survey of working people who have reached retirement age of 65:

• 47% are dependent on relatives
• 31% are forced to continue working or take up second careers
• 16% are dependent on a state pension – a mere R820 per month and only 6% are financially independent

Trends that make it essential to start planning well in advance for your retirement include:

Increased longevity

With improved medical technology people are living longer. Retirement funds therefore have to last much longer so that you don’t outlive your retirement capital. The current life expectancy of a person at age 65 is approximately 17 years for women and 14 years for men.

Healthcare costs

As people get older they are more likely to need medical care. Yet, more and more healthcare-related costs are being passed on to individuals after retirement. Many companies no longer subsidise medical scheme contributions for pensioners, and many pensioners are forced to reduce their medical scheme benefits, in order to afford premiums, when they need it most.

Early retirement

More and more people are deciding to retire earlier. This means that their retirement funds have to last longer and that they have less time to build up a retirement fund value. Women also have a longer life expectancy than men and therefore need to provide a higher level of savings on retirement.

Inflation

Inflation affects the buying power of a retiree’s income. That’s why it’s essential to have sufficient funds to provide for inflationary increases in income after retirement.

One way to get an idea of the effect that inflation has on the purchasing power of money is by applying the Rule of 72. By dividing 72 by the expected inflation rate, you can calculate the approximate number of years it will take for a sum of money to lose half its purchasing power.