Welcome to our April 2023 edition of FC Viewpoint.

IN THE NEWS:

• The JSE All Share Index were 4.4% higher from 75 502 on 13 March 2023 to 78 797 on Wednesday 19 April 2023.
• 1 US Dollar will cost you R18.19
• 1 Pound = R22.62 and
• 1 Euro = R19.94.
• Annual consumer price Inflation edged higher to 7.1%.
•  The prime lending rate in SA increased with another 50 basis points to 11.25% per annum.
• The price of Oil is $80 per barrel.
• The US year-on-year CPI number eased last month to 5%, the lowest level since May 2021
•  The fifth SA Investment Conference (SAIC) saw the five year objective of R1.2 trillion in private sector fixed investment in South Africa exceeded, with the investment commitments reaching a reported R1.51 trillion for the five year period.
• One Google search uses the same amount of computing power it took to send the Apollo 11 astronauts to the Moon.
• Every 5 years, average life expectancy increases by roughly 1 year.

To account for the impact of inflation, this year’s National Budget introduced changes to the retirement fund lump sum tax tables for retirement fund cash lump sums taken both before and at retirement.

From 1 March 2023, the tax-free amount that can be taken as a lump sum payout from a retirement fund increased by 10%, from R25 000 to R27 500 before retirement, and from R500 000 to R550 000 at retirement.

The Rules regarding withdrawals

•  You are able to take a once-off withdrawal from your pension or provident fund if you leave your employer, or from a   preservation fund before retirement.
• You may also withdraw from a retirement annuity and preservation fund in certain circumstances, such as leaving the country and ceasing to be a South African tax resident for an uninterrupted period of at least three years from 1 March 2021.
• You may also access a cash lump sum from your retirement fund when you retire, and your beneficiaries may choose to access cash from your retirement savings on your death.
• This tax-free amount is a “once-in-a-lifetime” or cumulative benefit, irrespective of the number of retirement funds to which a taxpayer belongs, and is reduced by any taxable lump sums received previously.
• Severance benefits are also included in the calculation of the lifetime benefit amount for tax purposes.

It is important to understand the access you have to your retirement fund savings, as well as the calculations used, so that you do not run into an unexpected tax bill.

The following chart compares the performance of the JSE in 2022 with the current performance year to date in 2023:

JSE ALL SHARE INDEX

2022 v 2023 to date

Wealth regards,

Fanie Jansen Van Vuuren CA (SA), CFP®

Director: FC Wealth and Investments (Pty) Ltd

E: [email protected]  |  T: 083 384 5868

W: www.fcfin.co.za