I am starting all over again at the age of 48. I got divorced and have no investments. I am working and would like to put a financial plan in place. What do you advise?
Your very first priority must be to provide for your retirement. If you're planning to retire at age 65, you have seventeen years to provide a pension for yourself. It's critically important for you to meet with an advisor who can help you draw up a plan.
South Africans are usually advised to save at least 15 percent of their salaries for retirement purposes, but if you haven't been doing this up till now, you will have to put aside much more, and perhaps think about delaying your retirement. Your advisor can help you determine a monthly amount. This will probably be necessary even if your company offers a pension scheme.
You also need to pay off any debt you may be in as a result of the divorce, and to avoid accruing further debt, as you definitely don't want to affect your ability to save. Paying off your debt early can save you thousands in interest charges, frees up money for investment purposes, and means you'll enter retirement in a stronger position.
Consider the RA route
Consider investing your money into a retirement annuity or RA. Because of their tax benefits, RAs are very attractive for retirement purposes. Ask your advisor about a unit trust-linked RA, which is generally a good choice.
If you don't have an advisor, you can ask friends or relatives to recommend someone. If you can't afford this route, rather ask your bank for assistance or approach a reputable financial institution and deal with one of their brokers.