International Retirement Plans

International retirement plans


When it comes to your retirement and the planning thereof, being covered by international pension plans could provide you with the benefits that you seek.

International retirement plans for your security

The key to enjoying your golden years lies in savvy retirement planning, although a local South African Retirement Annuity or Pension fund is an important part of any financial plan the benefits of International retirement plans cannot be ignored.

Using the correct international retirement plan can improve your tax efficiency, diversify your investment exposure thus reducing your risk and preserve your wealth for the next generation, all this helps to ensure that you have a higher level of financial security.

Effective retirement planning requires significant thought; let us show you how to keep your finances in shape by selecting the appropriate investment types and vehicles to keep more of your money in your pocket and grow what you already have.

It is important to understand that an International Retirement Plan is not a replacement of your local retirement annuity or pension plan, but rather the next step in moving your retirement planning to a more advanced stage.

When you think about it the largest expense any of us has is tax! To prevent any shortfalls in your retirement income, you need to know how to make use of certain tax benefits offered by combining your local retirement investments with your offshore retirement investments since the 2 are complimentary and work well together.
Benefits of international retirement plans

Offshore retirement plans are a very attractive option for individuals who:

  • Have reached the cap on allowable contributions to local pension products for tax relief. (Lowest of 27.5% or R 350 000 per year of your gross remuneration or taxable income)
  • Would rather receive a tax-free income in retirement than a tax deduction for contributions while working.
  • Want protected assets in a safe haven that is unaffected by local politics and economic turmoil while enjoying tax free growth while invested in an International Retirement Plan.
  • Have estate planning problems and are concerned about the erosion of fees and taxes on their wealth as it passes to their beneficiaries at death. By correctly structuring your International Retirement Plan there is the added benefit of wealth preservation since you will be able to transfer your wealth without incurring the 20% estate duty charge, the 3.5% executors fee and the Capital Gains Tax charged at death. Please note that a full Financial Needs Analysis is recommended to fully understand the implications on your estate at death before making any investment decisions.

The international retirement plan can be structured in a way that allows you to take advantage of the favourable tax treatment that is offered in certain jurisdictions to investors. It is important to note;

  • You have the choice of having your pension paid out in regular monthly, quarterly, annual or even ad-hoc lump sums. There are no restrictions on how you have to take your pension benefits.
  • You have access to all global financial markets and be able to select from a range of investment funds, direct equity and even fixed property.
  • You are the only person who can take your money. Your investment is safe and protected from creditors and will transfer seamlessly to your nominated beneficiary meaning you don’t need an offshore will.

Regardless of where you are in the world, you can make contributions to your international retirement plan. Contributions are also very flexible in that you can tailor them (increase, decrease or stop contributions etc) to fit your personal circumstances.

You can add lump-sum contributions at the beginning of your investment or at any time during the term.

We believe in focusing on strategies that reduce costs and save taxes since if achieved these are “guaranteed returns”. It is far easier to save 20% - 40% in tax and fees than it is to guarantee a return of 20% - 40% in the market.

A saving is as good as a return. Whether you make more money or just get to keep more of what you already made the effect is the same but keeping more of what you already have is far easier.

Comparison between local Retirement products and an International Retirement Plan

What are some of the things you can do to retire early?

The most important thing to remember when having the idea in mind of retiring early is ‘saving’. From as young as you can afford to ramp up your savings, do so.

The point cannot be stressed enough that in order to be able to retire early, you have to save intelligently. Tracking your finances and putting an end to mindless spending is a good start.

Keep in mind that in a room of 9 of your friends and family only one of you is likely to be able to retire according to South African retirement statistics. Are you that one?

In the pursuit of early retirement, sit down and have a serious think about how you would like to spend your time once you are no longer working. Lifestyle planning is an imperative step towards reaching your retirement goals. Make sure that you have an independent financial planner who you can trust to help you achieve financial stability.