Wednesday, 11 December 2013 - 20:00
Charts
Seed Weekly - Structuring Your Income at Retirement
This week we take another look at how to optimise your investments given the current legal and regulatory environment.
Retiring is one of life’s major events. In a way it is the culmination of your years spent at the grindstone and finally being able to fully enjoy the fruits of your labour. The road to retirement is filled with planning saving and compromises and, if not structured correctly, could lead to problems.
The 1st decision the near retiree needs to make is whether to invest your compulsory assets in a living annuity (ILLA) or to buy a guaranteed life annuity from a life insurance company. The difference is one I’m most readers would be familiar with; the value of the ILLA at any time is a factor of the capital invested, the percentage drawn out as an income, and the performance of the underlying investment, while the guaranteed annuity is a fixed payment for the rest of your life.
You are able to withdraw 1/3rd of your pension fund and retirement annuities in cash (provident funds can be taken fully in cash) at retirement but, because of taxes on the lump sum option, it requires some thought as to what amount should be taken.
Another source of capital should be your discretionary assets, the assets that fall outside your pension and provident funds and retirement annuities. The assets that fall under this category will, for the purposes of simplicity, be limited to local and offshore unit trusts and share portfolios. Owning a large pool of these assets can be beneficial to you thanks to favourable tax treatment of these assets on disposal. When drawdowns are made out of this asset pool you are taxed on your capital gains and dividends received. The taxes on discretionary drawdowns are in most instances less than on your compulsory assets. The below charts show how long R 5m would last if you needed R 20 000 per month as an income from either discretionary or compulsory assets:
Drawdowns from compulsory:
Drawdown from discretionary:
The difference is because the compulsory assets require you to draw a higher gross amount to still get the same amount out net of taxes. The liabilities line in the graphs refers to the amount of assets needed in a tax free world at any time to fund your drawdowns of R 20 000 per month.
The logical conclusion would be to keep your compulsory asset drawdown to a minimum and take the balance from your discretionary assets, but keep in mind that you can draw R 104 611 (excluding rebates) annually from your compulsory assets without incurring tax and depending on your age receive annual rebates. You also have a R 30 000 per year exclusion from the gains on your discretionary assets. It is therefore imperative to structure your assets before retirement in such a way as to take maximum advantage of both these annual tax benefits when you retire.
Conventional advice would usually be to draw the minimum of 2.5% per annum from your compulsory assets and the balance from your discretionary assets. This is in no way a one size fits all solution and should be tailored to fit your unique financial circumstances. At Seed we believe this decision materially impacts your financial situation and we make every effort to ensure we ‘stretch’ your assets as far as possible into the future.
Kind regards,
Stefan Keeve
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Wed, 11 Dec 2013
Top News
Gold prices edged lower on
Wednesday after a three-day rally driven by investors
short-covering, as a tentative U.S. budget deal supported
expectations for an earlier reduction in U.S. monetary stimulus. Full story
South Africa's rand was on a weaker footing on Wednesday as slightly better-than-expected retail sales data failed to make an impression. Full story |
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Ukrainian protest leaders on Wednesday said they would not hold talks with President Viktor Yanukovich until their demands, including that he resign, were met. Full storyItaly's Prime Minister Enrico Letta
won a confidence vote in parliament's lower chamber on Wednesday
after urging lawmakers to back his government or risk chaos Full storyLibya's government expects
eastern tribes to reopen three oil ports this weekend as pledged
but refuses to deal with an autonomy movement demanding a share
of oil exports, Prime Minister Ali Zeidan said on Wednesday. Full story |
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Markets | Newly-privatised Royal Mail Group
will join Britain's top share index following a strong
share price performance since its stock market debut, FTSE
confirmed. . . Full story | | European shares eased in late
trade on Wednesday, as increased certainty over U.S. government
spending following a budget deal there was overshadowed by
growing. . . Full story | | Britain's top share index ended
slightly lower on Wednesday with a provisional budget deal in
Washington raising concerns of a reduction in U.S.. . . Full story | | Stock markets worldwide slipped
on Wednesday after the U.S. Congress announced a provisional
budget deal, which heightened expectations of a stimulus
reduction by the. . . Full story |
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| Wall Street opened flat on
Wednesday as investors assessed a provisional budget deal
reached in Washington and its potential impact on an expected
wind-down. . . Full story | | Britain's benchmark equity index
failed to make much headway on Wednesday, as weaker bank and
mining stocks pegged back the stock market.. . . Full story | | European shares edged lower at
the open on Wednesday, led by Royal Bank of Scotland,
which slipped after a high-profile executive departure, as
uncertainty. . . Full story | | Offshore Chinese stocks in
Hong Kong posted their heaviest loss in nearly four months on
Wednesday, led by coal producers after the country's. . . Full story |
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SA Business | South African stocks fell for a second straight session on Wednesday, with trading volumes starting to thin out ahead of the Christmas holidays.. . . Full story | | South Africa's headline consumer inflation slowed to 5.3 percent year-on-year in November from 5.5 percent in October, Statistics South Africa said on Wednesday.. . . Full story | | South Africa-focused bullion producer Sibanye Gold has made a cash offer for junior rival Wits Gold, which like other smaller operations has struggled in the face of low prices, high costs. . . Full story |
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| Standard Chartered Bank has appointed new managers for two regions of its fast-growing African business, which is due to expand significantly in the next two years, it said on Wednesday.. . . Full story | | South Africa's retail sales grew at 1.3 percent year-on-year in October, just slightly above market consensus, from a revised 0.1 percent in September, Statistics South Africa said on Wednesday.. . . Full story | | United Nations peacekeeping troops in Democratic Republic of Congo have launched operations against a Rwandan Hutu rebel militia operating along Congo's border with Rwanda, the U.N. commander said on Tuesday.. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 44436.86 | -204.12 | -0.46% | JSE Top 40 | 17:00 | 39736.78 | -197.96 | -0.50% | JSE Gold | 17:00 | 1099.82 | -14.07 | -1.26% | JSE Financial | 17:00 | 32270.49 | -146.93 | -0.45% | JSE Industrial | 17:00 | 59342.12 | -71.46 | -0.12% | JSE Indust 25 | 17:00 | 52104.90 | -46.09 | -0.09% | JSE Resource | 17:00 | 49034.26 | -595.39 | -1.20% | DJ Futures | 19:42 | 15855.00 | -118.00 | -0.74% | DJ Ind | 19:58 | 15888.10 | -85.03 | -0.53% | SP 500 | 19:58 | 1788.91 | -13.71 | -0.76% | Nasdaq | 19:58 | 4021.56 | -38.93 | -0.96% | FTSE 100 | 18:35 | 6507.72 | -15.59 | -0.24% | DAX | 19:08 | 9077.11 | -37.33 | -0.41% | CAC40 | 19:08 | 4086.86 | -4.28 | -0.10% | Nikkei | 08:32 | 15515.06 | -96.25 | -0.62% | Shanghai | 09:28 | 2204.17 | -33.33 | -1.49% | Hang-Seng | 10:22 | 23338.24 | -405.95 | -1.71% | All Ords | 07:42 | 5109.50 | -36.70 | -0.71% | NZSE 50 | 06:48 | 4704.30 | -2.21 | -0.05% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1257.40 | -3.99 | -0.32% | Gold R | 19:59 | 13049.34 | 13049.34 | 0.00% | Gold R/kg | 19:58 | 419764 | -1763 | -0.42% | Silver $ | 20:00 | 20.3300 | -.0420 | -0.21% | Platinum $ | 20:00 | 1381.75 | -3.75 | -0.27% | Palladium $ | 20:00 | 734.50 | -1.50 | -0.20% | R157 | 17:26 | 6.14 | -.04 | -0.57% | R186 | 17:30 | 8.24 | -.04 | -0.48% | R204 | 17:25 | 7.20 | -.04 | -0.62% | R207 | 17:25 | 7.48 | -.07 | -0.93% | Brent Crude | 19:58 | 109.10 | -.29 | -0.27% | Rand / Dollar | 19:59 | 10.3782 | 0.0369 | 0.36% | Rand / Pound | 19:55 | 16.9835 | -0.0043 | -0.03% | Rand / Euro | 19:55 | 14.3226 | 0.0843 | 0.59% | Rand / NZD | 19:59 | 8.5467 | -0.0417 | -0.49% | Rand / AUD | 19:55 | 9.4138 | -0.0500 | -0.53% | Yen / Dollar | 19:59 | 102.4070 | -0.4660 | -0.45% | Euro / Dollar | 20:00 | 0.7243 | -0.0023 | -0.32% | Dollar / Euro | 19:59 | 1.3802 | 0.0042 | 0.30% | Pound / Dollar | 19:55 | 0.6097 | 0.0019 | 0.31% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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11/12/2013 | 146 | 209 | 67 | 422 | 205,191,591 | R13,099,247,721 | 147922 | 1158399 | 10/12/2013 | 198 | 164 | 68 | 430 | 205,797,146 | R11,399,573,947 | 140866 | 1098753 | 09/12/2013 | 161 | 198 | 58 | 417 | 168,909,736 | R9,877,654,571 | 122824 | 1121268 | 06/12/2013 | 191 | 144 | 77 | 412 | 207,039,260 | R12,536,496,288 | 134673 | 338347 | 05/12/2013 | 222 | 141 | 59 | 422 | 172,457,650 | R12,106,093,904 | 141953 | 262303 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 39,736.78 | -197.96 | -0.50% | Industrial | 59,342.12 | -71.46 | -0.12% | Mid Cap | 58,579.09 | -173.71 | -0.30% | Small Cap | 48,911.40 | -32.55 | -0.07% | Resource 20 | 49,034.26 | -595.39 | -1.20% | Industrial 25 | 52,104.90 | -46.09 | -0.09% | Financial 15 | 12,195.91 | -46.53 | -0.38% | Financial & Ind. 30 | 54,900.22 | -111.35 | -0.20% | All Share | 44,436.86 | -204.12 | -0.46% | Oil & Gas | 37,447.56 | -203.56 | -0.54% | Mining | 29,359.98 | -394.43 | -1.33% | Gold Mining | 1,099.82 | -14.07 | -1.26% | Platinum Mining | 46.94 | -.59 | -1.24% | GENERAL MINING | 8,556.96 | -115.70 | -1.33% | Oil & Gas Producers | 20,134.86 | -109.45 | -0.54% | Basic Materials | 26,055.98 | -355.25 | -1.35% | Chemicals | 22,997.74 | -57.24 | -0.25% | Forestry & Paper | 26,742.27 | -634.24 | -2.32% | Industrial Metals | 22,048.89 | -25.85 | -0.12% | Industrials | 43,333.47 | -25.28 | -0.06% | General Industrials | 131.58 | -.29 | -0.22% | Consumer Goods | 54,923.06 | -218.73 | -0.40% | Automobiles & Parts | 8,389.82 | -79.25 | -0.94% | Household Goods | 290.92 | 3 | 1.18% | Health Care | 74,858.67 | 439.40 | 0.59% | Beverages | 175.61 | -2.08 | -1.17% |
| | Index Name | RP | Move | % Move | Food Producers | 66,900.22 | -411.32 | -0.61% | Personal Goods | 1,017.74 | .90 | 0.09% | Consumer Services | 10,658.29 | 103.87 | 0.98% | General Retailers | 61,580.31 | 401.63 | 0.66% | Travel & Leisure | 5,486.21 | -2.89 | -0.05% | Media | 226.69 | 3.91 | 1.76% | Support Services | 2,512.63 | 2.71 | 0.11% | Telecommunications | 9,549.87 | -90.16 | -0.94% | Financials | 32,270.49 | -146.93 | -0.45% | Banks | 55,187.73 | -138.08 | -0.25% | Non-life Insurance | 47,971.54 | 245.01 | 0.51% | Life Insurance | 31,017.05 | -230.07 | -0.74% | General Financial | 3,167.63 | 3.76 | 0.12% | Technology | 44,196.61 | -396.21 | -0.89% | SHARIAH TOP40 | 3,702.35 | -38 | -1.02% | FTSE/JSE SHARIAH ALL | 3,829.72 | -32 | -0.82% | COAL MINING | 18,207.13 | -334 | -1.80% | FTSE JSE Fledgling | 6,085.65 | -14 | -0.24% | FTSE/JSE Alt X | 1,123.76 | 11 | 0.99% | SA LISTED PROPERTY | 481.77 | | -0.73% | CAPPED PROPERTY | 414.42 | | -0.55% | RESOURCE | 26,756.87 | -320 | -1.18% | DIVIDEND PLUS | 212.77 | -1 | -0.36% | FTSE/JSE RAFI 40 | 8,719.71 | -53 | -0.61% | Capped Top 40 | 21,009.11 | -99 | -0.47% | Capped All Share | 22,501.53 | -101 | -0.45% | JSE TABACO | 6,874.82 | -4 | -0.05% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | SBK | STANDARD BANK GROUP LIMIT... | HOLD | 06/12/2013 | OCE | OCEANA GROUP LIMITED | HOLD | 05/12/2013 | HSP | HOLDSPORT LIMITED | BUY | 03/12/2013 | NED | NEDBANK GROUP LTD | BUY | 03/12/2013 | BVT | THE BIDVEST GROUP LIMITED | HOLD | 03/12/2013 |
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Results Expected** Expected | Company Name | Fin. Date | 13/12/2013 | EHSV | September 2013 (Q) | 13/12/2013 | FIUUNIT | September 2013 (Q) | 20/12/2013 | CULINAN5.5 | September 2013 (Final) | 20/12/2013 | CULINANPR | September 2013 (Final) | 20/12/2013 | CULLINAN | September 2013 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | INDEQTY | 09/12/13 | 24/12/13 | 06/01/14 | ZAR 0.1750 | TELEMASTR | 06/12/13 | 10/01/14 | 20/01/14 | ZAR 0.0050 | NAMPAK 6.5 | 06/12/13 | 17/01/14 | 27/01/14 | ZAR 0.0650 | NAMPAK 6%P | 06/12/13 | 17/01/14 | 27/01/14 | ZAR 0.0600 | ARGENT | 04/12/13 | 20/03/14 | 31/03/14 | ZAR 0.0700 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | JDG CONV | 29/11/13 | 06/12/13 | 20/12/13 | ZAR 375.0000 | MRPRICE | 12/11/13 | 06/12/13 | 17/12/13 | ZAR 1.6800 | AME | 22/11/13 | 06/12/13 | 17/12/13 | ZAR 1.0000 | REX TRUE -N- | 18/11/13 | 06/12/13 | 17/12/13 | ZAR 0.6100 | REX TRUE | 18/11/13 | 06/12/13 | 17/12/13 | ZAR 0.6100 |
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Upcoming AGMs** Code | Company Name | Date | Status | MNY | MoneyWeb Holdings Ltd. | 11/12/2013 | Confirmed | GPL | Grand Parade Investments Ltd. | 11/12/2013 | Confirmed | GPLP | Grand Parade Investments Ltd. | 11/12/2013 | Confirmed | MST | Mustek Ltd. | 13/12/2013 | Confirmed | PPE | Purple Capital Ltd. | 13/12/2013 | Confirmed |
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