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There are many things that you could do to prepare for life after retirement. You could a monthly automatically salary transfer, put down long-tenure fixed deposits, purchase an endowment plan, and utilizing unit trust funds. Here are some elements to take into account.
1. Why Should You Start Planing Young?
People are living longer, thus, they need more savings to sustain their life after retirement.
The United Nations states that the average 60-year-old (the official retirement age is 60) Malaysian today is expected to live another 19 years, that means living till the age of 79.
2.What Are Your Retirement Objective?
Determine your plans after your retirement, many people prefer to continue working but with reduced hours. Others want to start their own small business venture, while some want ot travel the world once the children have flown from the nest.
Once you have your post-retirement lifestyle down, you will be able to plan your finances accordingly.
3. What Would Be Your Alternative Income?
It is advice that retirees have their an alternative source of income. This is due to to cost of inflation, insurance policies and for some retirees, a way of passing time.
4.Would Your Children Need Financial Support After Your Retirement?
Take in consideration if your children will need your help after you have retired. Many people are marrying later and later in life, as a result the children are still very young when they end up retiring.
Also, consider medical and financial emergencies that your children may need your help with and incorporate them into your planning.
- Dettagli
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Cost of living: South Africa vs the world
While South Africans often complain about the rising cost of living in the country, it remains one of the most affordable countries in the world.
This is according to new data from Deutshe Bank, looking at world prices for a number of goods and serves in terms of purchasing power.
The 2015 report follows indices like the Big Mac Index closely, but covers a far wider selection of goods than simply the famous McDonalds burger.
The Big Mac Index – which is also included in DB’s research – is based on the theory of purchasing-power parity (PPP).
This is the notion that, in the long run, exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a Big Mac burger) in any two countries.
The Bic Mac is selected for comparison as the popular fast-food meal is widely available across the world, and remains fairly consistent in pricing; however, it is by no means an exact science.
DB’s research covers more items, including the relative cost of living across 20 countries, car rentals and hotel rooms, as well as specific goods such as Coca Cola, beer, sports shoes, Levis jeans and Apple iPhones.
Prices in New York City are used as the standard measure, and all other prices are listed by city, where applicable, relative to NYC.
Global cost of living
Along with other emerging markets, South Africa has seen relatively large shifts in consumer prices – over 6% – between 2013 and 2014. This is an increase on par with economies like Brazil, India and Russia.
In relative terms of purchasing power parity, however, the cost of living in South Africa is just over 44% of that of the United States, showing relative affordability.
On the flip side, however, this trend of affordability in South Africa is notably shifting.
According to DB, in 2001, Johannesburg was the third most affordable city measured on the index. Fast-forward to 2014, and the South African city has disappeared from the top 10 completely.
“This year, however, the strength of the USD has significantly narrowed the gap between the two. Similarly, shopping in Europe and Japan now feels a lot cheaper than before.”
Brazil was the most expensive emerging market in the world and was more expensive than the US for several categories.
However, currency depreciation has brought Brazilian prices more in line with what one would expect for a country at its level of development.
India remains the cheapest major economy in the world across a range of products.
South African prices
In its report, Deutsche Bank measures countries across a basket of goods, looking at multiple cities where possible.
Two South African cities were featured: Cape Town and Johannesburg. Here is how South Africa’s averages compared to the New York standard, as well as how Cape Town and Joburg fared, head to head.
Item | Cape Town price | Johannesburg price | South Africa average |
Petrol (1 litre) | 143% | 143% | 143% |
iPhone 6 | 126% | 126% | 126% |
iPhone 5S | 120% | 120% | 120% |
VW Golf 2.0 TDI | 99% | 102% | 101% |
Levis | 93% | 106% | 100% |
Five star hotel rooms | 109% | 64% | 87% |
Sports shoes | 86% | 86% | 86% |
Coca Cola | 56% | 56% | 56% |
Taxi trip | 48% | 63% | 56% |
Economist subscription | 51% | 51% | 51% |
Men’s haircut | 51% | 45% | 48% |
Big Mac | 46% | 46% | 46% |
Car rentals | 42% | 42% | 42% |
Movie ticket | 31% | 37% | 34% |
Gym membership | 32% | 35% | 34% |
Beer | 27% | 26% | 27% |
Public transport | 20% | 27% | 24% |
Marlboro cigarettes | 22% | 22% | 22% |
According to the data, South Africa’s highest relative charge is for petrol, where the country pays 143% the relative value of a litre of petrol in New York.
On the other end of the spectrum, vices such as smoking are more affordable in the country, where a pack of cigarettes is only 22% of the relative value in the States.
Looking at the cities, of the 18 items, Cape Town and Joburg differed in price in nine – six of which had higher prices in Joburg.
Education, dates and holidays
Using Harvard as its standard, DB also analysed business school tuition fees and salaries offered to graduates across the world.
In South Africa, tuition fees at Wits and UCT were only a fraction of those at Harvard – 14% – but with an average starting salary of US$43,556 for graduates, South Africa ranked lowest for pay.
In it’s “cheap date index”, Cape Town offers the 7th most affordable night out, with date costs amounting to only 40% of the same night in New York.
Joburg prices amount to 47% of NYC’s prices.
A cheap date consists of taxi rides, McDonalds burgers, soft drinks, two movie tickets and a couple of beers.
The weekend getaway index, which looks at a two night stay at a 5-star hotel, four meals, snacks and car rentals, among other things, also works out to be relatively cheap in South Africa.
Cape Town prices work out to be 89% of the New York values, with Joburg prices even cheaper at 61%.
- Dettagli
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At what age must an employee retire?
In the absence of agreement between the employer and employee, there is no fixed age. So, to avoid uncertainty, employers should specify a retirement age in their employment contracts (or policies linked to that contract).
If your contract is silent as to a retirement age, can you ask an employee to retire if you think he or she has reached his or her sell-by date?
No one can force you to retire. You're allowed to work for as long as you like and no one is allowed to discriminate against you because of your age.
In terms of section 187 (1)(f) of the Labour Relations Act, the dismissal of an employee based on his or her age will be automatically unfair. Such a dispute will be dealt with by the Labour Court and up to 24 months of the employee’s remuneration may be awarded as compensation.
But should you feel like you're ready to leave the workforce and enjoy your golden years, here are some of the things you need to know before packing up and going on retirement. You and your employer should, however, agree on a retirement age.
There are 3 possible situations that you could find yourself in:
- Your employment contract requires you to retire at a certain age.
- You've agreed with your employer on a retirement age or there's a company norm.
- There's no mention of retirement in your contract and there's no agreement.
If you sign an employment contract that stipulates a retirement age, then you can legally be required to retire at that age. The organisation won't be required to give you notice.
If the retirement age isn't in the contract but is agreed or if there is an organisational norm, then the employer can give you notice requiring you to retire at that age. The notice period will be the same as the notice period for termination of employment set out in your contract of employment.
When would there be deemed to be an organisational norm? There's a general understanding that the "normal" retirement age is 55, 60 or 65 but this understanding is too vague to be useful in specific instances. Indications of the organisation's norm can be found in:
- the rules of a company's provident or pension fund (but this isn't definitive), or
- company policy.
If there's no mention of a retirement age in your contract and there's no organisational norm, then you can continue to work until you're unable to do your job properly. Your employer can only terminate your contract in accordance with the labour legislation (that's for misconduct, operational requirements or incompetence) and will have to follow the procedures set out in your contract and labour law. The courts have found that it's unfair discrimination for your employer to terminate your employment services just because of your age.
For more information on the law around dismissals, see the Department of Labour's guide to the Labour Relations Act called "Know Your LRA".
What if you continue to work after the retirement age?
There's no legal certainty regarding the rights of an employee who works beyond retirement age. It's thus advisable for the employer and employee to clearly define the terms of employment after the retirement age, for example how long the employee will continue to work for and what notice is required to terminate the employment.
Where can you get an income from after retirement?
After you retire you'll usually rely on a pension or provident fund for your income.
You can either draw a state pension or you can contribute to a private pension fund or provident fund. For detailed information on how private provident funds and pension funds work, visit the Black Sash and ETU paralegal advice website.
Things to do when you retire
Once you retire, there are a number of things you can do to spend your retirement time.
Travel
Travelling is great when you retire, especially at the beginning when you're still healthy. You can take your time and see the world. If money is a concern, stick close to home and see all the sights your community has to offer.
Go back to school
You can finish that degree or audit some courses. Learning how to paint or play the guitar are good ideas too, as you'll fill your days practising.
Get a hobby
Retirement is a great time to take up a new hobby or take up a new activity. If you're not very active, then you should take up something like swimming, golf, cycling or yoga. Anything that keeps you active is good for both your mental and physical health. You may even make some new friends.
Volunteer
There are countless volunteer opportunities, even in the smallest community. For example, the library, an animal shelter, a seniors' home, a hospice, your church and the food bank.
Garden
Gardening is a good way to keep moving and even grow some fresh food. Join a gardening club to expand your knowledge. If you don't have your own backyard, find community plots.
Start a small business
Another way to keep busy is to start a small business. It's also a way to generate extra income. The options are endless: open a small shop, become a handy-person, sell crafts online, tutor or even consult.
Be a mentor
If you have valuable skills and still like working in your field without all the pressures, think about becoming a mentor. You'll spend time working with young people at the beginning of their careers, and it's a great way of giving back.
Join a gym
Many gyms have special programs for seniors. If there's a walking track, you can join a walking club and stroll several kilometres a day, while chatting away.