Solutions

Your family is maturing, and your focus is now on preserving and growing your wealth. For many individuals, their careers are peaking and the energy and many hours that they have devoted to their careers, is rewarded with success in terms of position, and probably the highest level of income during their productive lives. Your focus at this stage should therefore be to firstly preserve your capital, but also to grow it in a properly diversified portfolio, across asset classes, and with the best of breed asset managers that actively manage your portfolio on a daily basis.

A maturing family often implies adult dependants with very expensive needs, for example tertiary education and their own membership of a medical aid. Many clients may also during this phase sell their companies, or receive “golden handshakes”, well before their normal retirement age. As a result they may consider new job opportunities, or even decide to start a new business. They may even consider accessing their retirement savings, in order to fund their new business. One of the major risks that need to be addressed at such a juncture is the opportunity cost of withdrawals from your current retirement savings, and the likelihood that you may lose that capital in the event that your new business fails.

When making a withdrawal from your retirement savings, the first significant consequence is that this will invariably result in a tax liability. A withdrawal is considered a distribution from the plan. This means that the necessary taxes need to be paid on the amount distributed. At the moment the following table will apply: