HomeHome SearchSearch MenuMenu Our productsOur products

Confirmed: A recession and a junk status down grade is inevitable

by , 30 May 2016
Confirmed: A recession and a junk status down grade is inevitable
“The rand could hit R60 to the dollar by 2019: Chris Hart” - Business Tech
“Chris Hart: Nothing can prevent SA's slide to junk” - Fin24

I spoke to Chris about his recession and junk status predictions at the South African Investor member meeting on 24 May 2016. I asked him if he was misquoted in the media. However, he was adamant that he is right about these predictions.

One of the delegates at the meeting asked Chris if this isn't simply fear mongering from the media.

Chris answered, “Yes, sometimes the media will publish information simply to sell papers and grab attention but in this case, they're reporting the reality of the situation. It's real, it's happening and there's nothing we as investors can do to change the situation.”

So, the real question you should be asking yourself right now is this....

What happens to your retirement savings if South Africa reaches the junk status by the end of the year?

The biggest concern right now is for those investors nearing retirement. They’ve spent more than half their lives saving and investing for their golden years. The impact of a recession and the rand tanking will wreak havoc on retirement savings.
Guy Algeo, one of the pillar one advisors for the South African Investor believes that the threat of a downgrade is real but it’s not the only thing investors and retirees should be concerned about right now.
Guy explains, “It’s quite astonishing to think that life expectancy has effectively doubled in the last century! This is a global phenomenon driven by advances in medicine and improved quality of life.”
The impact of the increase in life expectancy and the coming financial crisis on those nearing retirement is concerning.
You see, the dynamics of four living generations of family life will create new demands on social culture.
And this creates massive pressure on the social benefit systems in developed markets. Put simply, governments don’t expect to support twice as many people for twice the length of time.

So what do you need to do to secure the retirement you deserve?

According to Guy, the new Retirement Reforms introduced by government will impact us in different ways depending on whether you’re retired or not. 
While many South Africans are unhappy about the new legislations, Guy is convinced these changes are quite positive and investors should be looking to take advantage of the new legislations.
He says, “The new Retirement Reforms can help protect retirement savings, reduce taxes on retirement funds, standardise tax relief across different retirement vehicles and reduce costs.”

How to handle your retirement planning under these three scenarios

Scenario #1: If you’re a 55 year old – You’ve got 10 years to make some significant changes to build the retirement you need.
Scenario #2: If you’re 60/65 years old, you’re about to take your retirement pay-out, so you need to know where to invest to grow your income.
Scenario #3: If you’re a 70 year old, you have already retired – So you need to know how to generate consistent income that will be enough to live comfortably for the rest of your life.
In the May issue of The South African Investor, Guy reveals exactly what you should be doing right now, under each of these scenarios, to make sure that you:
1.      Increase your retirement savings
2.      Postpone your retirement to as late as practically possible
3.      Supplement your income once you’re retired
4.      Cut back on living expenses in retirement
5.      And most importantly, keep fees on your retirement savings at the lowest level possible.
He explains how you can successful achieve each of these key points, whether you’re 50, 60 or 70 years old. For the full explanation... read the latest issue of the South African Investor now. 

Confirmed: A recession and a junk status down grade is inevitable
Rate this article    
Note: 5 of 1 vote

Have a trading or investing question? Click Here

Related articles

Related articles

Watch And Learn

Trending Topics