While a life partner can be wonderful, they should not be considered as a part of your retirement plan as they may not even have saved sufficiently to meet their own requirements.
Women tend to live longer than men, and since research shows they generally earn less, this means that they need to save more for longer than their male counterparts.
It is important to familiarise yourself with how you were married and what the terms are should the marriage end either in divorce or death. If you are married in community of property, you and your spouse’s assets will form part of your deceased estate and your spouse will by law be entitled to 50% of the assets.
You can be married out of community of property with or without the accrual system. Being married without accrual is the easiest system to work with in your will and estate; your assets remain your own and you may deal with your assets as you wish with no claim from your surviving spouse.
Having sufficient planning in place for both parties is always advisable, and each party should have their own savings and investments. A tax-free savings account is a great place to start, allowing you to save up to R36 000 a year without paying tax on the growth.
Increasing your contributions to your work retirement fund will help you accumulate larger savings for retirement.
When leaving your employer, a number of tax-free options are available, and one should seek financial advice to understand which is the best choice for you:
- Transferring your pension to your new employer fund;
- Transferring your pension into a retirement annuity fund;
- Transferring your pension into a preservation fund; and,
- Keeping your funds invested within your previous employer’s retirement fund through a paid-up status (not contributing further to the fund).
Regular consultations with a certified financial planner will ensure that you are on track for a secure retirement.
- Langa is a certified financial planner at Alexforbes
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