6 benefits of investing in a retirement fund
Preparing for your retirement by investing in a retirement fund ensures that all your hard work over your lifetime pays off. This strategy opens doors for a secure financial future and offers you the flexibility to tailor your investments with various partners and options.
Retirement funds allow you, with your financial advisor, to choose when and how much you invest and the unit trust you prefer. And with the state of South Africans’ retirement savings, these 6 benefits of investing in retirement funds will delight you.
Benefits of investing in a retirement fund
#1 A good start to saving for retirement: If you haven’t started saving for retirement, investing in a retirement fund is a versatile solution to jumpstart that journey. This is true whether you’re a full-time employee, contract worker, or self-employed.
Note: While most employers’ retirement benefits include minimum contributions, our suggestion is always to top it up with a retirement fund, as this significantly boosts your retirement savings and income.
#2 Fantastic tax deductions: Up to 27.5% of taxable income or remuneration is tax deductible with retirement funds (capped at R350 000 annually). Interest, dividends, and capital gains are also tax-free. Music to our ears!
#3 Affordability and accessibility: Retirement funds are among the most affordable savings vehicles. Remember, even if you can only invest a small monthly amount, it adds up and will substantially impact your retirement savings.
Note: Retirement calculators can help you determine your ideal contribution amount.
#4 Safe from creditors: Retirement savings should only be for retirement. Therefore, if you are ever declared insolvent, you can rest assured that your retirement savings are shielded from creditors, and your savings will remain intact for their intended purpose.
#5 Locked-in for long-term growth: Investing in retirement funds has a restriction, but this one is entirely in your favour. Having access to your investment restricted until 55 prevents impulsive withdrawals and ensures long-term growth. We think that’s a commitment worth making!
#6 Diverse, customisable retirement savings options: Your needs, lifestyle, and risk appetite will change over the years. But whatever your needs and risk tolerance are, retirement funds offer a range of customisable investment options. From diversified funds to tailored risk-profiled solutions, and share portfolios, the versatility retirement funds provide is wonderful. Your financial advisor can assess and help you align your retirement fund investment options with your risk profile and retirement goals.
At mCubed Group, our priority is to help you secure a comfortable retirement. Our retirement funds provide access to top-tier investment administration, expert advice, and complete transparency for optimal long-term results. With our team of FAIS-accredited financial advisors, you can confidently navigate the complexities of retirement planning. Contact us today to reap the rewards of investing in your retirement.
