Objective
To match available financial resources with financial needs for
death, disability, employment, retirement and retrenchment in the
best possible way; taking into account the effect on disposable
income, tax and your estate.
Ongoing and Integrated
Optimising income, tax, investment and estate planning is an
ongoing process. It requires continuous fine tuning as personal
circumstances, legislation and the available planning options
change.
Scenario-Specific
Financial planning must optimise the financial resources and
solution for each of the following scenarios:
- Employment remuneration
- Death
- Disability
- Retirement
- Retrenchment
Financial Planning Disciplines
Financial planning has to optimise and integrate a number of
inter-related financial decisions. The financial planning model
must take into account the effect of every decision on each of the
following disciplines.
| Disciplines |
Objective |
| Tax Planning |
Minimise income tax by utilising all available deductions to
increase remuneration value |
| Remuneration Planning |
Optimise the reward for labour by ensuring the best possible
remuneration structure |
| Investment Planning |
Maximise investment retuns within a predefined risk mandate,
providing for diversification and flexibility within an acceptable
time frame |
| Death and Disability Planning |
Provides for fate. Quantification of capital and income
requirements |
| Estate Planning |
Limit estate growth, reduce existing estate duty liabilities
and ensure effective ultimate estate distributions |
| Retirement and Retrenchment Planning |
Maximise the capital vs. income withdrawal of available
benefits |
The Planning Process
| Step |
Considerations |
| Define the assumptions and quantify the financial
need |
Financial requirements:
- Net after-tax income required
- Investment returns and projections
- Inflation expectations
- Risk mandate
|
| Identify the available resources |
These include:
- Investments in properties and shares
- Assurances
- Retirement funding benefits such as pension fund, provident
fund, deferred compensation and retirement annuities
- Accumulated leave and other employer funded gratuities, such as
retrenchment benefits
- Possible future accruals, such as share options, inheritances,
etc.
|
| Compare the various planning options using interactive
computer modelling |
Analyse the alternative scenarios taking into account:
- Disposable income
- Tax implications
- Estate duty
- Capital accumulation/growth
|
| Optimise the results |
Match the best financial solutions to:
- Personal preference
- Practical considerations
|
| Implement the plan |
- Initiate action
- Monitor progress
- Adapt to change
|