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Happy May. I hope that this month we will see more stability and that Trump and Iran can reach some kind of deal to reopen the Strait of Hormuz.
The issue in the Middle East is still causing some volatility in markets, but I am confident that the structure of your portfolio still offers good protection against large swings.
I would, however, like to discuss two practical scenarios that will be relevant to many people: the “sandwich generation,” and then end with some practical tips on how you can structure your finances to offer some relief from the current petrol price hikes. |
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The Sandwich Generation |
The "Sandwich Generation" refers to professionals balancing the financial support of ageing parents with the costs of raising children and securing their own retirement.
Without a clear strategy, this "middle-management squeeze" can lead to significant emotional and financial burnout.
To protect your wealth while honouring your family commitments, consider these essential pillars:
Initiate the "Audit of Dignity": Help parents review their draw-down rates and fixed costs to prevent a future liquidity crisis. Tax-Efficient Support: Pay medical aid premiums directly to potentially benefit from SARS Medical Scheme Fees Tax Credits. The "Sibling Compact": Formalise a shared contribution plan with siblings to ensure the financial care of parents is balanced and sustainable. Strategic Rightsizing: Evaluate if moving parents to a lower-maintenance property can unlock vital capital for a guaranteed life annuity. Protect Your Own Cup: Ensure that supporting others doesn't result in pausing your own RA or TFSA contributions, which are vital for your future independence. The starting point remains that you will have to have some discussions with your parents and siblings to ensure smart decisions are made before it is too late. |
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Smart Money Moves | Everyone is unfortunately feeling the pinch of petrol price hikes, and I decided to offer some practical tips on how you can structure your finances to create some breathing room. |
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The "Interest-Rate Pivot" on Short-Term Debt
With interest rates in flux, clients should avoid the "minimum payment" trap. | |
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Optimise the "Spousal Tax Bracket" For married clients where one partner is in a lower tax bracket, there is an immediate opportunity for tax-efficient growth.
If the lower-earning spouse hasn't maximised their R46,000 annual TFSA limit, the higher-earning spouse should "gift" that amount to them (subject to the R150,000 annual donations tax-free threshold). Immediate Result: The family unit grows its tax-free wealth faster while keeping more "net" income away from SARS. |
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Review Section 18A Donations
Many professionals donate to schools or charities throughout the year, but forget to track the certificates. Also, make sure your donations go to a registered NGO that can issue 18A certificates. Collect all Section 18A tax certificates now rather than waiting for tax season. This provides a clear view of the tax deduction available, allowing you to potentially increase your final RA contribution for the year to further lower your tax bill. |
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Some of my podcast episodes you can listen to here: |
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Life Insurance – If today were your last day... listen here. |
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The thief in your bank account... listen here. | |
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Contact:
Mauritz Oberholzer A Financial Advisor employed by Stonehouse Capital (Pty) Ltd, an authorised Financial Services Provider (FSP 50464) Mobile: +27 82 774 1996
E-mail: mauritz.oberholzer@stonehousecapital.co.za
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