• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Sweidan and Co

Sweidan and Co

Header Right

Office - 031 350 4580

  • Home
  • What We Offer
    • Corporate Services
      • Health Care
      • Employee Benefits
    • Estate Planning
    • Insurance
      • Risk Cover
      • Short Term Insurance
    • Investments
      • Local Investments
      • Offshore Investments
      • Conservo Product
  • Medical Aid
  • Blog
  • Contact Us
  • Home
  • What We Offer
    • Corporate Services
      • Health Care
      • Employee Benefits
    • Estate Planning
    • Insurance
      • Risk Cover
      • Short Term Insurance
    • Investments
      • Local Investments
      • Offshore Investments
      • Conservo Product
  • Medical Aid
  • Blog
  • Contact Us

What Are Self-Employed Pension Rules?

What are Self-Employed Pension Rules?What are Self-Employed Pension Rules?  It’s true operating on your own has never been more popular, at least in the world of work. Thanks to technology and the huge strides it has made over the last decade a record number of South Africans are choosing to walk away from traditional office jobs and into the world of freelancing and entrepreneurship.

Being your own boss in this way has lots of advantages. It allows you to set your own routines, and in most cases work wherever you want, provided that you can access an Internet connection. Freelancing allows people the chance to work with people and companies all over the world and, perhaps the best part for most people, with no boss hovering over them and telling them what to do.

Freelancing online is only one way of working for yourself of course. What has become known as the ‘gig economy’ is booming in SA, as more people also turn to the likes of Uber and Airbnb as alternative sources of income and employment.

There are downsides to all of this of course. One of the biggest however is something that the majority of freelancers and gig workers – most of whom are Gen X ers and Millennials – have yet to give much thought to – a lack of retirement benefits.

What Are Self- Employed Pension Rules?

The Only Rule is Taking Control of Your Own Financial Future

As a self-employed person, you have no employer making pension contributions for you and no set, company chosen retirement plan you can contribute to in order to set yourself up for a bright financial future in retirement.

As a self-employed worker, you can, however, set up your own retirement plan. And it is something you should do right away, even those still in their twenties, as the earlier you start the less you will need to invest and the better off you will be when you are ready to retire.

This can be hard. Although many freelancers end up better off financially than they might have done in the traditional world of work their income is rarely set. There are great weeks and leaner weeks. For this reason, it’s best that self-employed people choose a retirement plan that is not easy to access and to which you can commit to automatically contribute a percentage of your average income to each month.

What are Self-Employed Pension Rules?A retirement annuity (RA) is often the best beginning choice for the South African freelancer or a small business owner. For successful retirement planning, self-employed professionals need to stick to the plans which cannot be withdrawn from easily, or preferably not at all prior to retirement age. In addition, RAs offer the following advantages:

  • Accrued growth is not taxed during the lifespan of the policy. There is no income tax or capital gains tax on the investment return earned in a retirement annuity.
  • You may qualify for an annual tax-rebate, depending on your personal tax situation.
  • Funds invested in an RA are protected from creditors; this may become very important if a business fails or a freelancer is unable to work and falls behind on bills.
  • It allows for estate-planning as retirement money does not form part of your estate (you can accumulate a huge amount of wealth without being ‘penalised’ for being wealthy). If structured properly you can avoid estate duty tax and executor’s fees.
Need help finding the right RA? That is where a session with a financial planner can be a great help. In fact not only will they be able to help you create a workable plan for saving for retirement but can also offer advice on how to deal with life on an income that is never quite fixed.
What are Self-Employed Pension Rules? There really is only one it is you and you alone that is responsible for your Pension and it is better to get your head around this early one to ensure your financial freedom later in life. That being said we would always advise you speak to a professional consultant before deciding on your best option

Filed Under: Finance, Retirement

Previous Post: «Smart Investments Everyone Can Make in 2019 Smart Investments Everyone Can Make in 2019
Next Post: How Independent is Your Financial Advisor? Financial Advisor»

Primary Sidebar

Recent Posts

  • InflationWhat NOT To Cut From Your New High Inflation Budget
  • Investing Against Recession in 2022Investing Against Recession in 2022
  • Last WillWhy You Need to Make a Will Now
  • Where are Billionaires Investing Their MoneyWhere are Billionaires Investing Their Money in 2022? 
  • Investment Advice from Warren BuffetInvestment Advice from Warren Buffet for 2022

Categories

  • Budgeting (24)
  • Estate Planning (2)
  • Exercise (4)
  • Finance (56)
  • Financial Planning (8)
  • Gap Cover (1)
  • Health (12)
  • Hospital Plans (2)
  • In the news (4)
  • Insurance (12)
  • Investing (52)
  • Medical Aid (12)
  • Offshore Investing (9)
  • Property (2)
  • Retirement (15)
  • Tax (5)
  • Wellness programmes (2)
  • Work From Home (1)

Copyright © 2022| PAIA Manual | Privacy Policy| Robo Invest | Sweidan and Co is an authorised Financial Services provider FSP 45893