As we find ourselves in a new year, embedded within an ever-changing financial landscape influenced by global events and economic shifts, establishing your comprehensive financial plan is essential to navigating the uncertainties and capitalising on opportunities that may arise in 2024.
Key strategies and considerations on your financial journey through 2024
Evaluate and set clear Financial Goals
Review your investment strategy from the start. Ensure you and your Wealth Specialist / Financial
Advisor define and establish your short-term and longer-term (retirement) goals and devise an investment plan / strategy to achieve these goals.
Review and adjust your budget
A sound financial plan commences with a realistic budget. Review your income, expenses and savings goals and objectives. Identify areas where you can trim or reallocate funds to align with your priorities. Regularly revisit your budget to ensure that it remains adaptable to ever-changing circumstances.
Emergency / Rainy-day Fund Reinforcement
A rainy-day fund is a separate savings account that is used for emergencies or unexpected expenses. The importance of an emergency fund cannot be overstated. Aim to bolster your emergency savings to provide for at least three to six months’ worth of living expenses. The objective is to provide peace of mind and security during times of financial stress and uncertainty.
Investment Diversification
Continue to assess your investment portfolio with your Wealth Specialist / Financial Advisor to ensure it aligns with both your risk tolerance and financial goals and objectives. Continue to ensure your investments are well diversified across several asset classes and aimed at mitigation of risk.
In lieu of the above-mentioned, ensure that your offshore portfolios are in appropriate vehicles. Probate and situs tax in different jurisdictions can create issues. Together with your Wealth Specialist / Financial Advisor, you can opt for more appropriate vehicles where tax is managed, and estate planning is considered.
Optimising annual tax benefits & retirement planning
Regularly review your retirement savings strategy. You can contribute up to 27.50% of your taxable income annually to retirement products and claim these contributions back from SARS or deduct them from your taxable income.
It is important to optimise your annual tax benefits. Should you invest over and above the annual retirement contribution allowance of 27.50%, maximised at R 350 000 per annum, these contributions will be collected within a ‘disallowed pool’. These funds can be offset against one’s income tax with regards to an annuity income upon retirement. By so doing, one is essentially creating tax free retirement
in a few years.
Estate Planning
Upon reviewing your investment portfolio and investment strategy, ensure that you and your Wealth Specialist / Financial Advisor complete a holistic review of your Estate Plan, ensuring that your Will is up to date and in place. This will ensure that ‘unwanted’ taxes are avoided through improved investment structures and that one’s family is taken care of upon your passing and through the effective finalisation of your Estate.
In summary, as you embark on your financial journey in 2024, a well-crafted financial plan should provide guidance through the ups and downs and the twists and turns that the year may bring. By evaluating your financial needs, diversifying investments and assessing your goals and objectives with your Wealth Specialist/ Financial Advisor, your Financial Plan 2024 should ‘weather the storms’ whether they be financial, political, or market related.
