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WHAT DOES RETIREMENT MEAN TO YOU?

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By Gary Fisher, Head: Member Education Services and Individual Consulting at Alexander Forbes

 

No matter your age or current stage of life, you probably have questions in the back of your mind about retirement, such as “When do I retire?’ ‘What options do I have?’, and ‘Who can assist me?’.

The simple answer is that you decide when you want to retire – there is no specific event or deadline which forces you to retire. The company you work for stipulates your required retirement age but this does not mean that the stipulated date is the starting point of your retirement. If you are lucky enough to continue working past this date either for your current employer or a new one, then what you do with your retirement savings becomes of the utmost importance.

Today, there are different options available to you when your required retirement date becomes a reality and you are asked to make a choice. One of the options is that you simply notify your employer that you have not yet decided to retire from the fund and would like to leave your money in the fund until further notice. Nothing will change and you remain a paid-up member of that fund, receiving regular statements and notifications. The only thing that changes is that you can no longer make contributions into the fund. However, your retirement savings will continue to attract growth based on your selected investment strategy, just like it did before your required retirement age. You will notify your fund when you want to retire and need your money.

Some retirement funds offer additional benefits while you are employed, such as group life insurance cover, personal health insurance, disability cover and funeral benefits. These benefits usually end at your required retirement age. However, should you still require this cover, make enquiries with your employer whether a continuation option exists and what it would cost you to continue with the cover.

Those who are many years away from their required retirement age might be thinking all this talk about retirement doesn’t apply to them yet. Think again, as time flies by quickly. So while you have the opportunity and time on your side take the necessary steps to ensure that when your required retirement date comes around, everything is in place and the planning is done. In this way, you can make a stress-free, seamless decision about your retirement.

 

Here are some tips which will assist in securing your financial well-being by the time you reach your retirement date:

  1. Make additional contributions into your retirement fund

Most retirement funds have flexible contribution rates which allow you to choose how much you want to invest each month. The decision you make, however, has far-reaching consequences, as it affects the final amount that you receive at retirement. Choose an affordable amount and review your decision at least once a year. If you are lucky enough to receive a bonus, consider taking a portion and paying it into your retirement fund. To work out what is an affordable amount for you, ensure that you have a budget in place which sets out all your earnings and expenses and how much extra money you have available once all your expenses are taken care of. Reviewing it regularly allows you to keep track of how much extra you can afford and contribute.

 

  1. Harness the power of compound interest

Compound interest is when you get to the point of where the interest on your investments, is earning interest. The key to this solution is to start investing as soon as possible and as much as you can afford.

To understand compound interest, we need to first understand simple interest: You deposit R1 000 into your savings account assuming an interest rate of 5% a year. At the end of the first year the amount in your account is now R1 050 (made up of your R1 000 investment and R50 interest earned).

What happens the following year? This is where compound interest starts to work its magic. You will earn interest on your initial R1 000 deposit and interest on the interest you have already earned. In our example the total amount in the account at the end of year number two is now R1 102.50 assuming the interest rate is constant. The secret ingredient here is time: the longer you leave the money invested, the greater the amount becomes and the more you harness the power of compound interest.

 

  1. Keep your retirement savings invested when changing jobs

According to the Alexander Forbes Member Watch, the average South African employee retires on a pension income that’s around 30% of their last salary. This is mainly because they take their retirement savings in cash when changing jobs rather than keeping them invested. Withdrawing their retirement savings between jobs interrupts the power of compound growth. You have a number of options available to you to ensure you remain invested for the long term, including leaving your retirement savings in the fund when leaving your employer.

  1. Partner with a professional financial adviser

Take time to read widely and research financial topics you are grappling with so that you can ask informed questions when you meet with a financial adviser. The role of the adviser should begin from a position of trust and that trust can only be built over a period of time. Find an adviser who can explain financial concepts simply. Make sure they are suitably qualified and carry the Certified Financial Planner designation. In this way, you will receive targeted advice that is unique to your circumstances to assist you in achieving your financial goals both now and in the future.

The decision of when to retire remains yours, but before you get to that point and need to make important decisions, take some time to assess your current situation. Make necessary tweaks to ensure you set yourself up for your best possible retirement.

 

Finance

A BRIEF GUIDE TO TRADING IN CRYPTOCURRENCY SECURELY

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Trading in cryptocurrency is becoming increasingly popular in the financial world. Crypto’s huge rises in value over recent months has encouraged many to consider it a valid and important way to invest their money. However, it can be tricky for someone new to the world of crypto to know how to start. The process of setting up can take a few days, but once you’re ready to go, it can be fairly simple to start trading.

 

Find A Crypto Wallet

To store crypto, you will need a cryptocurrency wallet. There are many wallets out there to choose from, in both software and hardware forms. You could choose a free to use software wallet, to begin with, and then invest in a more secure hardware wallet if you plan to hold amounts of crypto for the medium to long term. Hardware wallets typically cost anywhere from £50 to £150, so it is worth doing your homework and finding the right wallet for your needs.

 

Sign Up With A Brokerage

You will need an account with a brokerage service to begin trading. It would be best if you looked for brokerages that offer good security, an easy-to-use interface and plenty of cryptocurrencies to choose from.

You will need to provide some identification to open an account with a reputable brokerage, and it may take a few days to get your account verified. Therefore, it is vital to do your research and ensure that the brokerage you choose is legit before providing any personal information.

 

Get Help From Experts

Once you have your account up and running don’t rush to buy your first Bitcoin. As a beginner to the world of crypto trading, there are plenty of potential pitfalls, and talking to experts can go a long way to reducing the risks.

Check out Traders Of Crypto, a cryptocurrency community that provides expert, collective knowledge to those starting out with crypto trading. There you can find plenty of free guides to help you on your trading journey.

 

Choose Your Crypto

The next step is to decide on the crypto you want to trade in. There are thousands out there to choose from, with the most well-known being Bitcoin. The more popular the crypto, the more likely it is to remain stable, so it may help to start with Bitcoin for your first transactions.

Once you have some experience, you could branch out to smaller altcoins, though it is often wisest to keep most of your trades to the bigger coins.

 

Make Sure You Have The Capital

You will need sufficient capital to buy and trade cryptocurrency. You can add this to your brokerage account, typically by bank transfer or debit card payment. It is crucial to keep in mind that the value of crypto frequently changes, so ensure that you are spending only what you can afford.

 

Start Trading

You can start by either trading cash for crypto or crypto for crypto. However, keep in mind that there may be brokerage costs for each trade, so you should choose your trades wisely.

 

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SKILLING AND METROPOLITAN X PARTNER TO OFFER ADVANCED TRADING EDUCATION PROGRAM

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Skilling, a Scandinavian fintech providing online trading on a wide range of world markets, has announced a strategic partnership with the trading education and empowerment institution, Metropolitan X Group, which is set to establish and propel valuable trading education for its clients.

 

Metropolitan X Group, whose universal mission is to provide financial research and trading education to traders of all levels, has developed a training program that delivers a well-rounded curriculum through innovative theoretical-practical learning webinars. The program offers live trading sessions providing real-time analysis and commentary on market events. Together with live social market updates and insights, the Metropolitan X Group equips its student-traders with the tools and skills they need to analyse, evaluate and trade the markets effectively and with greater success.

 

This is Skilling’s first education-focused partnership and it marks a significant step forward in Skilling’s plan for trader education and its investment in upskilling traders. The education program is expected to open aspiring traders up to new possibilities through personalized learning and create in them a deeper understanding of the markets.

 

“Client education is a priority for Skilling. We want to empower our traders with market knowledge and trading education so that they can navigate any market environment more successfully. We are very excited to be providing top education through Metropolitan X Group’s trading and advanced learning programs and are excited to see traders utilise these newfound skills on their trading platforms,” said Michael Kamerman, CEO of Skilling.

 

By partnering with Metropolitan X, Skilling can deliver top-tier education from experienced trading professionals that will help clients improve their investing knowledge, and develop deeper market insights to be fully apt and equipped to identify better trading opportunities in the markets.

 

“We are excited to partner up with a broker that believes education is the key to success in this demanding market. Together we shall provide traders with the necessary tools and knowledge to tackle the ups and downs of trading. Traders taking advantage of our shared services with Skilling will receive exciting exclusive market insight like no other,” says Sebastián Hernandez, Director of MetropolitanX.

 

The power of this evolving partnership demonstrates Skilling’s firm positioning on trader education leadership and will drive success through strong growth in more educated and skilled new customers taking on the markets.

 

“There are undoubtedly both inherent opportunities and risks in trading and investment. Investor enthusiasm has shown it has the ability to storm the markets through organized online trading communities and unprecedented access to hundreds of instruments. This underpins both the scale and power of today’s individual traders, making it vitally important that individuals have the necessary education and also the right tools at their disposal to make smarter trading decisions,” said Michael Kamerman, CEO of Skilling.

 

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