Deton Private Wealth

- Frequently Asked Questions
  • At what age can I retire?
    This question, as simple as it sounds, is not linear. Everyone has their own retirement goals, income needs, and savings. The bigger questions we ask, are:

    • * How much debt do you have?
    • * What are your income requirements?
    • * What capital amount have you got invested?
    • * Do you have any medical expenses or unforeseen capital requirements?

    Before knowing some of the answers to the above questions, it is hard for us to determine a retirement goal. This is why we use our Financial Needs Analysis tool and retirement calculators to put a financial plan specific to your needs.
  • How much should I be saving to reach my retirement goals?
  • When should I start saving for retirement?
    There is no time like the present they say. In our experience, the younger you can start, the easier it is to keep the habit and start building a solid base for retirement. That being said, it may not be too late to start now, but we can use our "can I retire" calculator to determine what you may need to cover your shortfall.
  • What’s the difference between passive and active fund management?
    The fundamental difference is that fact that an active manager may make calls on different assets, or stocks at any given time, i.e. trade, whereas a passive investment is as the name implies, passive. There should'nt be that many, if any trades in the fund, which means that there is a slightly lower overall cost. With our funds, we use a combination of active and passive funds, as this gives us the benefit of lowering our overall cost, but also retaining the exposure.

    We also feel that there is a place for both an active and passive strategy, and neither is right or wrong. We do switch between the different strategies as we see opportunities.
  • What risk profile am I?
    Risk is a subjective topic. To some, Equity, or stocks are deemed risky, to others cash is a risk as it can run under inflation. To determine your true risk profile, we use a series of questions to see your tolerance to volatility, your time horizon, and other variables to get an indication as to what asset allocation blend you should have.

    There is no exact science to it all, but with the use of our FNA, we can get close to what you require. The other thing that is often overlooked is the fact that an individual’s risk profile can change over time due to their age, or circumstances.
  • Can I invest too much into my retirement funding?
    Yes, and No, there is a limit of 27.5% or R350 000 per annum, but any investment over this amount can still be claimed back on retirement. It is in your favor to go to the maximum, and not over.
  • Should I have an RA if I already have a company owned Pension fund?
    This would depend on your retirement goals, and what your contributions are to your existing Pension or Provident fund. We normally suggest retirement contributions of no less than 15% of your total income, so you would need to assess what your shortfall might be or use our can I retire calculator.
  • Do I need a TFSA (Tax-Free Savings Account)?
    The TFSA can be a useful addition to any wealth plan, but you need a longer time horizon to achieve the full benefit. We would need to take into account what you wanted to contribute, and over what period of time.
  • Should I use a traditional Annuity or a Living Annuity?
    This would depend on what you require, as both a Guaranteed, or traditional Annuity, and a Living Annuity have their pros and cons. Clients that generally have a lower income requirement from their capital and what to retain the capital for a spouse or dependents benefit the most from a Living Annuity, while other clients with no dependents or partner may prefer to get an income until death, and it falls away.

    Our personal preference is the Living Annuity, as this can prove to be the most versatile to clients if managed correctly.
Contact Deton Private Wealth
Contact Deton Private Wealth