Gepf benefits are guaranteed – maya good ways to make money fast on money

What many members do not fully understand is that the good ways to make money fast GEPF is a defined benefit fund. This means the pension received by members has nothing to good ways to make money fast do with the investment performance of the fund. It relates purely to the number of years of service, your average salary in the last two years multiplied by good ways to make money fast the accrual rate. The accrual rate is defined under the law the governs good ways to make money fast the GEPF.

This is completely different from a defined contribution company retirement good ways to make money fast fund or a retirement annuity. Over the last three years the markets have performed poorly, and pension fund members would have experienced little to no good ways to make money fast growth in their pension fund. Yet for members of the GEPF, their pension is still determined by years of service and good ways to make money fast salary.

What is concerning is that some GEPF members have been good ways to make money fast convinced by financial advisers to resign before retirement so that good ways to make money fast they can place their funds in a market-linked pension preservation fund. Scare tactics like the risk to the GEPF member of good ways to make money fast poorly performing funds, such as the huge losses in steinhoff shares, have partly driven this behaviour. Members have also opted for this route as they believe good ways to make money fast this is a way to leave some money to their good ways to make money fast beneficiaries, as a preservation fund can be converted to a living good ways to make money fast annuity. Living annuities are market linked and any fund value at good ways to make money fast the time of death can be left to beneficiaries.

In comparison, investors in market-linked living annuities have had an extremely poor experience since good ways to make money fast 2015 when the markets have provided close to zero returns. With living annuities, retirees rely on market performance to provide a sustainable income, so when they experience poor market returns, they may be forced to draw on their capital to good ways to make money fast meet their income needs rather than use the growth in good ways to make money fast the fund. Who pays for poor investment returns?

Sithole says south africa is one of the few countries good ways to make money fast where the state pension is guaranteed by government and it good ways to make money fast cannot be reduced. Unlike countries in europe and the UK, where the government reduces the state pension when it runs good ways to make money fast out of money, the government is required by law to honour retirement benefits. This means government must pay the balance of the cost good ways to make money fast of the retirement benefits. Bad investment decisions will mean that government must take money good ways to make money fast from other vital areas of spending to make up for good ways to make money fast any shortfall in the GEPF.

In 1996 government inherited a bankrupt GEPF which only had good ways to make money fast enough money to pay out 72c for every R1 owed good ways to make money fast to members. This was due to bad management by the previous government good ways to make money fast which had used the GEPF to try and prop up good ways to make money fast the south african economy when international funding dried up due good ways to make money fast to apartheid. The result was that government had to fund the shortfall good ways to make money fast through taxes.

What is of more concern is that the longer-term funding for GEPF liabilities has dropped significantly. If one looks at the next 30 years, based on current assumptions, the funding level will fall to 75.5%. In other words, the funding level over the long-term is 75c for every R1 of liability. This could be a potential problem for government who would good ways to make money fast have to fund this shortfall if the levels do not good ways to make money fast recover.

Sithole explains that in calculating the minimum and long-term funding levels, various factors are considered. These include the probability of members leaving the fund, the age on leaving the fund as well as family good ways to make money fast statistics and gender. On the financial side they consider market returns, future salary increases, promotional salary increases as well as future pension increases.

Any changes in the assumptions around these factors could change good ways to make money fast the outlook. Better-than-expected investment returns would have a positive impact. Sithole says certain factors have put pressure on the fund good ways to make money fast such as longevity. The average age expectancy of the GEPF is 19 years good ways to make money fast post-retirement. If members live an extra five years, that means the fund is paying out for a longer good ways to make money fast period of time, increasing the funding requirements.

Sithole says another challenge is that government has been contributing good ways to make money fast at a lower rate and at some stage will need good ways to make money fast to increase its contribution. Given the tight national budget at the moment, government will not be prioritising this as long as the good ways to make money fast GEPF current funding level remains well above 100%. Sithole says more moderate salary increases could also help stabilise good ways to make money fast the long-term funding level. Finally, GEPF may need to review the above-inflation increases it is currently providing to its pensioners. Leaving a legacy and securing your income

Most parents have a dream of leaving a legacy for good ways to make money fast their children when they pass away. They hope they can do this with their retirement fund. The reality is that most people have insufficient retirement benefits good ways to make money fast to meet their income needs for their retirement, considering we are likely to live at least 20 years good ways to make money fast after retirement. If, however, you have enough income from your GEPF pension to meet good ways to make money fast your needs, then you could consider using the lump sum portion, which is also available as part of your retirement package, for your children.

You could invest this amount and if you do not good ways to make money fast require it for your income needs, you can leave it to your beneficiaries. Keep in mind that you can donate R100 000 a good ways to make money fast year to your children without paying donations tax. For example, if you received R500 000 as your lump sum benefit good ways to make money fast and invested it for twenty years with an average return good ways to make money fast of 6% above inflation, it would be worth R1.6 million in today’s value.

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