Good News for Retirement Funding!

Following the finance minister’s 2022 budget speech, we are pleased to report a change in legislation that will allow local investors to place 45% of their retirement funds offshore – this is a sizeable increase from the previous allocation of 30%!

Offshore portfolios come with limitations under the Prudential Retirement Funding regulation to protect portfolios from too much currency volatility. This is because retirement savings are intended to provide a Rand income for life. There are also regulations in place to limit how much of your retirement savings you can put into certain asset classes and locations. The most important of these being:

- Offshore Assets 45% - was 30%

- Equity 75%

- Listed Property 25%

- Hedge Funds 10%

The South African market has been outperformed by many international markets for several years, leading to this increase in allocation of offshore assets. This gives retirement investors the opportunity to allocate a larger percentage of their retirement savings offshore. We believe the extra 15% offshore diversification should afford you the opportunity to grow your funds into a larger amount in the long-term.

It is never too early to save for your future! If you would like to put together a retirement plan, diversify your retirement portfolio or just acquire some more information, please contact us or comment below and we will get back to you!

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