ArnoW Posted June 6, 2014 Report Share Posted June 6, 2014 I have never been so confused or indecisive in my entire life!I have now resigned from my job because I leave for Australia in a few weeks. Problem now is I have to make an election of what I want done with my pension and I must make it early next week. And this is where the dilemma arise. I have been pondering this for such a long time and I still am not closer to any idea of what I must do.Question is: Do I cash in and take the money to Australia OR do I keep in SA in a preservation fund My concern is twofold: 1. What if the rand depreciates so drastically against the AUD in future that I lose in the end; and if I do not take the money out in the same year I leave the country, the discretionary allowance does not apply any longer and I will have to get tax clearance from SARS first before transfer can take place (this might ne difficult from Australia?)2. If I do move it to Australia, I must re-invest or something. But what to do? The funds cannot sit in my Aus bank account indefinitelt because then there is no growth.What did some of you forum members do when you has to decide this? Quote Link to comment Share on other sites More sharing options...
RYLC Posted June 6, 2014 Report Share Posted June 6, 2014 Take the money now is my advice. Yes you will pay tax, lose a larger proportion than you would like but at least it is in your hands.In Australia you could start off with term deposit for six months or so while you decide what to do. Don't rush into a scheme offered by your new Aussie bank. Rather do some research yourself and find your feet. Also rather have the money accessible in case you need it.When we came over 14 years ago, we had a term deposit for a while and then used the money as the deposit on a house. Best thing we ever did.So just park the money for a while and look around. Six months growth in the grand scheme of things is not too bad. 1 Quote Link to comment Share on other sites More sharing options...
ArnoW Posted June 6, 2014 Author Report Share Posted June 6, 2014 Very sound advice Crisplet. Thanks. Make a lot of sense! Quote Link to comment Share on other sites More sharing options...
StevePorter Posted June 6, 2014 Report Share Posted June 6, 2014 Hi ArnoIt's a big decision and one you should make only once you are fully informed.If you would like to drop me a line with your contact details (steve@cashkows.com) I will happily explain your various options, the implications and associated processes to help you in the decision making process. There's no charge for this kind of consultation.If one of the options you are considering involves introducing the funds to your Australia super fund there is a bit of a timing issue you should be aware of.Regards,Steve 1 Quote Link to comment Share on other sites More sharing options...
Classicman Posted June 6, 2014 Report Share Posted June 6, 2014 I have been doing a lot of research on this now as well. I have a substantial pension that I need to decide on and it looks as though I will be cashing in and transferring when we leave.If you were a betting man and believed the exchange rate would improve in the medium term, the put it in a preservation fund or a blocked bank account to transfer when/if you can get a better rate.I'm leaning towards a clean break though. 4% interest on a 90 day term loan isn't far off what you would get in SA, and then you have 3 months in Oz to consider your options. Quote Link to comment Share on other sites More sharing options...
ArnoW Posted June 6, 2014 Author Report Share Posted June 6, 2014 Steve, thanks so much. I am already dealing with Pieter at your offices. He has given me invaluable advice and I was actually at the point of asking him to open the Bidvest account for me this morning. And when I picked up the phone the doubts set in again!!!Classicman, good advice thanks!! Quote Link to comment Share on other sites More sharing options...
RYLC Posted June 6, 2014 Report Share Posted June 6, 2014 Having a lump sum on hand when you are new to a country can give a lot of peace of mind.Once you are settled and have done some research and your investment decision is to put the money into superannuation or some other investment, then those options will still be available to you then.If you invest the money first, then fall on hard times the money won't necessarily be available to you again. If you put it into super straight away it will be locked away until retirement.Of course there are timing issues with all investments, tax implications to consider yada yada yada but NOTHING beats the peace of mind of having an available nest egg when you first move over. The investment opportunities aren't going anywhere... Quote Link to comment Share on other sites More sharing options...
Bronwyn&Co Posted June 6, 2014 Report Share Posted June 6, 2014 Arno I agree with the advice you have received. If you look at any AUD/ZAR graph over the past few years it's a no-brainer. Don't try and time the exchange rate as this is pointless. But do argue for a better rate!Yes, you might move at 9.80 and next week it's 9.60 so you want to kick yourself, but this time next year it is very likely to be over 10.00 or worse.Time will tell.Here are the exchange rates the ATO uses. For eg in 2003 the average exchange rate was 5.60:AUD1https://www.ato.gov.au/Tax-professionals/TP/South-Africa,-Hong-Kong,-New-Zealand-and-United-Kingdom/ 1 Quote Link to comment Share on other sites More sharing options...
HouseInOz Posted June 6, 2014 Report Share Posted June 6, 2014 Arno,I would suggest taking the money now, optimising tax incentives and perhaps put the money in a short/medium term investment bank account in Australia. In hindsight, I wish we did this (much earlier). You can definitely get good advice from the friendly staff at cashkows,com regarding this, to take an informed decision.Good Luck! Quote Link to comment Share on other sites More sharing options...
Tiermelk Posted June 6, 2014 Report Share Posted June 6, 2014 If you look at this it should be a simple decision. :-) But then the experts also say we should not look at the past to predict the future. I am still wondering should I do it now or wait for the Rand to strengthen in the sort term... 1 Quote Link to comment Share on other sites More sharing options...
ArnoW Posted June 6, 2014 Author Report Share Posted June 6, 2014 Thanks for the good advice everyone. I now have clarity on this. Will take the money to Aus. Thank heavens for this forum! 2 Quote Link to comment Share on other sites More sharing options...
KAZ Posted June 8, 2014 Report Share Posted June 8, 2014 Hi Arno,I know where you are at I am leaving in 6 weeks time, finishing up work in 2 weeks but am really stressing about the SARS Tax clearance and formal emigration process and getting the blocked account for my RA's before I leave. I think I am cutting it fine. I am only going to SARS once I have worked my last day as they want your Tax returns up to date.I have had my policies paid out and will be moving funds using the discretionary allowance via Exchange4 Free. They give a better rate than the banks and no commission.I will be making my RA's paid up prior to leaving until such time as my blocked account is created.Good Luck with all the decisions and safe travels. Quote Link to comment Share on other sites More sharing options...
RichardH Posted June 9, 2014 Report Share Posted June 9, 2014 Hi Arno The only advice I can offer is get ALL your SARS documents, clearances etc that you can before you leave SA as well as get the blocked rand account sorted. This is all easier to do in SA. Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted June 10, 2014 Report Share Posted June 10, 2014 If you decide to leave money in SA in preservation fund (or cannot get it out for some reason) then you should consider investing in Rand hedge stocks so you will not really be exposed to devaluation of the Rand.It is very assuring to have the money in Australian bank account and since we did not immediately buy property we could pay annual premiums on insurance and get a discount as well as pay cash for car. Term deposits are safe but if you want to invest in shares there are many index tracking stocks available (similar to Satrix). Once you consider buying property you will be faced with potential 20% deposit. With the average price of property in Australia between $500k and $600k it is at least $100k = R1m.Good luck. Quote Link to comment Share on other sites More sharing options...
Gerhardk Posted June 10, 2014 Report Share Posted June 10, 2014 I forgot about this, but when we applied to rent property, the agent required proof of funds since we did not have work yet, so another benefit of having money in the bank in Australia. Quote Link to comment Share on other sites More sharing options...
Bronwyn&Co Posted June 10, 2014 Report Share Posted June 10, 2014 If you decide to leave money in SA in preservation fund (or cannot get it out for some reason) then you should consider investing in Rand hedge stocks so you will not really be exposed to devaluation of the Rand.Good luck.That's a good idea. I wonder if I can do that with my little old Liblife RA I made paid up 7 years ago? Quote Link to comment Share on other sites More sharing options...
Classicman Posted June 10, 2014 Report Share Posted June 10, 2014 South African Rand UpdateFRIDAY: SOUTH AFRICA CREDIT RATING DOWNGRADE?This week we’ll go the fundamental route as the key focus is on a possible credit rating downgrade on Friday.Both Moody’s and Standard and Poor’s will make an announcement on Friday that will significantly impact South Africa going forward and could see the Rand take a hiding.We’re already seeing the market start positioning for a potential downgrade with USDZAR breaking above 10.70 and GBPZAR moving above the key 18.00 level.A ratings downgrade may see USDZAR drive towards 11.00 and most likely see the next move weaker within the long term trend on the ZAR.The key focus this week is really on this key announcement.If affects the entire country and the overall economic picture in SA is turning very very bad. It’s not pretty and it’s quite simple. There is simply no good story to tell. Nothing.USDZAR 1 Month Chart – USDZAR approaching a three-month high, new key support levels at 10.75 Quote Link to comment Share on other sites More sharing options...
Tiermelk Posted June 10, 2014 Report Share Posted June 10, 2014 That's a good idea. I wonder if I can do that with my little old Liblife RA I made paid up 7 years ago?Bronwyn&Co, you should be able to do that, but the older ones have very few investment options. 1 Quote Link to comment Share on other sites More sharing options...
ArnoW Posted June 12, 2014 Author Report Share Posted June 12, 2014 Thanks so much for the advice everyone. The process of transferring the money with Cashkows has been started. Ps: I can really recommend Cashcows for these thinhs. They have been efficient, friendly and gave very good advice. Contact them! Pieter and Carla have been awesome to work with! Quote Link to comment Share on other sites More sharing options...
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