Interesting articles about insurance

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Your finances and the 2014/2015 SA Budget

How does the latest SA Budget affect you?

At the end of April a third of 2014 will have passed. It went by in a flash and if you still haven’t had time to consider what the 2014/2015 budget means to you and what consequence it will have on your daily life and your pocket, here are some of the highlights.

The SA Budget and Income Tax:

Taxable income – (R) Rates of tax
0 – 174,550               – 18% of taxable income
174,551 – 272,700 – R31,419 + 25% of taxable income above R174,550
272,701 – 377,450 – R55,957 + 30% of taxable income above R272,700
377,451 – 528,000 – R87,382 + 35% of taxable income above R377,450
528,001 – 673,100 – R140,074 + 38% of taxable income above R528,000
673,101 and above – R195,212 + 40% of taxable income above R673,100

The tax-free portion of annual income received was adjusted as follows:

• Under 65 years: R70,700 (previously R67,111)
• 65 to 74 years: R110,200 (previously R104,611)
• 75 years and older: R123,350 (previously R117,111)

The basic interest income exemption remains unchanged at R23,800 and SARS is in the process of implementing the ‘tax-preferred savings account’ system, which is understood to be tax free for the investor. More information was promised to follow in the future for all to have a clearer understanding of the proposal.

• Withdrawing from a Retirement-, Pension- or Provident Fund before retirement age, the first R25,000 will be tax exempt. Thereafter, the current scales will apply. What’s also in the pipeline is the fact that you will have to preserve all or a portion of Provident Fund monies at withdrawal stage. This may be a saving grace for many South Africans as in the past, one was able to withdraw all the cash from any of the listed funds earlier than retirement, and this premature access has been a huge factor to elderly people living in lack.

• For the diligent savers to provide for the autumn years, there was good news. After  1 March 2014 when retiring from these funds, the first R500,000 will be exempted from tax . Government is serious about supporting citizens to provide for their own retirement.

• Your income protection contributions will not be tax deductible any more, but  if you do claim, the benefit will be.

• From 1 March 2015, the tax privilege for Pension-, Provident- and Retirement Funds will be as follows:
– A deduction equal to 27.5% of taxable monthly income, to the maximum of R350,000 per year, in total from all of these funds, will be allowed.

– Your employer’s contribution will be reckoned as a fringe benefit from next year.


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How to avoid the biggest mistake when you retire

When it comes to thinking about your retirement, it is very  easy to imagine sitting back, doing as little as possible, enjoying the autumn of your life. What you should be thinking of is how you can avoid financial stresses and strains when you get there! To avoid these, you have to avoid making the biggest mistake most retirees make.

Don’t give up all your active income

Active income is the money you make from slogging hard or what you generate from your business. Active income is the opposite to passive income which you will get from your pension or retirement annuity. If you work more, you can increase your active income. You can only increase your passive income by getting better returns on your investments.
Most people who retire, give up their active income and this has 2 negative effects:

  1. The longer you go without your active income, the harder it is to get it back.
  2. Relying on your passive income means inability to make good investment decisions.

The dream of a retirement where you follow your dreams, never realise for most people. To achieve this lifestyle of luxury in your golden years will take a very large pension or retirement fund. To achieve that lifestyle means opting for riskier investments in the hope of bigger financial rewards and the potential to devastate your retirement dreams.

Part-time work after retirement has plus points

The way to take the pressure off your passive income is to work. Many retirees find that working makes them feel better about themselves too. It doesn’t mean slogging away full-time. There is  a variety of things you can do to generate an active income. Look at part-time opportunities which could be consulting work related to your previous employment. An online business doing something that you love, is also an option.

In your own business, you can still be involved in running the company, while others can do the lion share. By generating an active income, you make more money and don’t have to worry about your investments. This way you enjoy your retirement.

That’s the way to  avoid the biggest mistake you can make when you retire.


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The Nkandla versus E-toll Argument

As recently as last week-end the citizens of South Africa was taught a very valuable lesson. Or was it? We were taught that no-one can or should try to force you and me to pay for anything you did not ask for or gave permission to be installed. The teacher of this lesson is the one person in the country we should respect and pay attention to. In fact, the teacher is the leader of our country.

It is a little confusing as the teacher was at the head of the government who installed the e-toll system. Without our permission I must add. This is also the person who had alterations done at his private home without his permission, he wants us to believe. He is the one who is refusing to pay the costs of those alterations even if it is hugely to his and his family’s benefit. At the same time he and his government wants to force us to pay e-toll which yield no benefits to us. What happened to: ‘what is good for the goose is good for the gander’? One can only say: ‘Eish!’

Why is E- Toll on Gauteng Freeways opposed?

  • It is irrational, unreasonable and impractical and wasn’t planned for the best interest of the public
  • It is riddled with inefficiencies, extremely costly and opposes far simpler existing methods within Government policy to collect this revenue.
  • Tolling Gauteng’s freeways is an unnecessary waste of billions of SA Tax payer’s money
  • No valid reason was provided and is unacceptable to the people who ultimately pay.
    Users pay not only the expense of the road construction but also suffer the heavy and unnecessary burden of this collection system.
  • E-Tolling in Gauteng was planned to raise over R95bn (236% of the required amount) – an utter and unnecessary waste of the road-users money. There is no intention to stop or reduce the tolling once the system is paid for. eToll charges will remain and increase every year.
  • These routes have been paid for through taxation. Years of infrastructure neglect now brings the time for Government to conduct repairs, but they omitted to plan for it. Now they introduce an additional tax which is extortion, since they provide no alternative public transport services and routes.

We did not ask for it, should we pay?