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Author Topic: What about our pension?  (Read 3000 times)

Offline Didi77

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What about our pension?
« on: October 29, 2007, 09:48:47 am »
Went to see our broker and he is adamant that we should not be taking the pension payout. He wants us to take the R 500 000 od that we have accumulated in pensions over the last 20 years and re-inverst it in a Old Mutual company's pension fund so we do not lose 30% of it to tax.

Please can you guys advise me?



Offline Amber

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Re: What about our pension?
« Reply #1 on: October 29, 2007, 10:22:56 am »
Hi Didi
I would say it depends on how long you have to go until you reach pensionable age (normally 55)  How badly do you need the money there to help you settle in and a look into the crystal ball to see what the exchange rate is going to do in the years to follow.
Personally if I had the luxury of that option I would still take the payout and pay 30% tax even if it made me feel sick!  I have very little faith left in SA's economy and would still have to wait 20+ years to get the money.
My father-in-law worked for the Rhodesian Railway for most of his adult life.  He thought he had a great pension to see him through his old age but because of exchange rate etc he gets nothing.  It is very sad
Good luck with your choices.
Amber
Faith is to believe what you do not yet see; the reward for this faith is to see what you believe



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Re: What about our pension?
« Reply #1 on: October 29, 2007, 10:22:56 am »

Offline Shirls

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Re: What about our pension?
« Reply #2 on: October 29, 2007, 12:53:29 pm »
Of course he does not want you to take your money.... he can earn comm from you reinvesting!

We have stopped our RA's here because we really don't see the benefit of keeping a pension fund going when we are not going to retire here. Also, how much are you going to really get out? What if SA ends up like Zim - with no forex to send the money to you anyway!

IMHO - as much as it burns the body parts, pay Trevor his tax and get your money to go!

Offline Didi77

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Re: What about our pension?
« Reply #3 on: October 29, 2007, 08:13:25 pm »
Thanks guys. I also feel like I want to cut my losses and run Don't wanna leave anything here  >:(

The broker explained that 80% of the investments will be in overseas investments not in SA - even so it is still paid out in SA rands.

He recons that because Old Mutual is a international company (based in London) I can not possibly loose my pension.

I really do not know what to do - finances and investments are realy not my stong point.

Johan1, Willie and Coleen - any advice?



Offline Nolan

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Re: What about our pension?
« Reply #4 on: October 29, 2007, 10:40:48 pm »
I am in no position to advise, but I personally wouldn't leave a cent in SA or in SA'n hands when I leave, for me the risks and uncertainty are too great.

Offline jafa77

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Re: What about our pension?
« Reply #5 on: October 30, 2007, 06:09:13 am »
I agree. I took every cent and paid off all debts. I have no economic ties to SA now.

Offline Cameleon

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Re: What about our pension?
« Reply #6 on: October 30, 2007, 06:34:24 am »
Yip Didi, pay the taxes, and take your money! Don't leave anything to be embezzled by other grimy little paws



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Re: What about our pension?
« Reply #6 on: October 30, 2007, 06:34:24 am »

Offline Didi77

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Re: What about our pension?
« Reply #7 on: October 30, 2007, 11:40:19 am »
Someone mentioned that you only pay 15% tax now and not 33% on your pension payout. Anyone know if this is so?

I will try phoning the tax man Thursday to confirm...



Offline zatexnz

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Re: What about our pension?
« Reply #8 on: October 30, 2007, 12:35:46 pm »
We had most of our policies paid out.  There are one or two that don't pay out until we're 50 or something.  with those we made them "paid up" - i.e. - not contributing to them anymore.  We've written those off, and if there's anything worth paying out, when the time comes, we will do something about it then.
In the mean time, we set ourselves up nicely in the USA.  Now we're sitting with the same problem... but this time, we don't have the problem of worrying about not getting our money out one day, or that it will be worth nothing... so we're keeping most of them going in the USA.
lekker sweet as, y'all
~ Colleen

Offline Sandramiles

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Re: What about our pension?
« Reply #9 on: October 30, 2007, 02:25:32 pm »
My opinion is that you take the knock and get your money out while you can.  I am taking my pension as apyout paying the tax and taking it with me, who know if SA goes like Zim they may not let you take it out in years to come.......

Offline mikencarmen

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Re: What about our pension?
« Reply #10 on: October 30, 2007, 03:42:39 pm »
We will be taking ours, and forgetting about what could have being and start again...I keep thinking about how great Zim was…look at the state it is in now. :(

Offline Didi77

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Re: What about our pension?
« Reply #11 on: October 30, 2007, 06:28:33 pm »
Its not really as if we will be using the money and losing it. We plan to buy (well put down a deposit) for a house and that is surely even a better investment than in Investec/ Old Mutual?

The other option is that we take a 1/3 payout taxfee and invest the rest in Investec...

Where is Johan1? He is always so sharp with the finance stuff  :help:



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Re: What about our pension?
« Reply #11 on: October 30, 2007, 06:28:33 pm »

Offline Didi77

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Re: What about our pension?
« Reply #12 on: November 19, 2007, 08:29:11 pm »
I’m back to the finance stuff again and still battling with this question. Have been to see "experts" and they just manage to make me  >:( with remarks like Local is good and SA has a great future. Stupid mutts. If I thought SA had a great future I would not be leaving now would I?  ??? Sorry,..... some people just drive me  :crazy2:

We are having problems deciding on:

1.   Leaving the pension fund here in SA as an annuity or pay 40% tax
2.   Bringing the bucks left after tax to NZ and re-investing it in a house
3.   Bringing the bucks left and investing it in NZ for 5 years to re-gain the tax lost and then deciding on investing or a house
4.   Bringing the bucks and immediately putting it back into an annuity/ pension to try win back the tax lost?

Does anyone know how much does property grow $ wise? If I invest lets say all my savings in buying a house - what % growth can I expect? Or is this an impossible question?

My argument is that if I invest the money in SA (in an annuity) it will grow with 30%, but 30% in rands are very little compared to the same growth in NZ? Can I not make back the 40% lost by investing in NZ than keeping the full 100% in SA at 30%?

I hope this makes sense?



Offline AndreCT

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Re: What about our pension?
« Reply #13 on: November 19, 2007, 09:50:00 pm »
Hi Didi

First off I am not a licensed financial advisor.

If you do cash in do not invest it in a Pension or Annuity in NZ. Invest it in an exchange traded fund or some other vehicle that does not have the commission structure of insurance products.

Look at how the item will be Taxed in NZ. 1st 4 years is Tax Free in NZ if you keep the money offshore. So look at investing in Auz, or Europe or China.

You will need a financial adviser in NZ to help maximise your after tax return.

"My argument is that if I invest the money in SA (in an annuity) it will grow with 30%,".
Please quote me anyone that has had that kind of growth paid out from an annuity over more than 10 years in SA. (not the value statements).

Lastly I would not mix up retirement savings and home deposits (but that just me). Are you selling your house in SA? This may result in you subsidising you day to day expenses with retirement savings. (if you do use the savings as a deposit, you must be disciplined enough to pay the "mortgage savings" into a saving vehicle of some kind and not just enjoy the better lifestyle a lower mortgage payment allows).

Regards
Andre



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Offline Didi77

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Re: What about our pension?
« Reply #14 on: November 19, 2007, 10:03:20 pm »
Hi Andre

Thanks for the answer.

No no home selling - only the pension. If we use it for a deposit we will save the mortage savings as pension and save on the long run with no rent/ high interest rates?

But basically what you are saying is that if you were in our place, with this pension which you do not desperately need to survive in NZ, you would also cash it in and get it out SA?

Who would be able to help with that offshore investment? A bank? It would make more sense to pay it direct to that investment thank to NZ bank account and then again back out the country?