While emigration is typically a costly affair, South Africans looking to move also need to consider their retirements and possible regulatory changes going forward.
According to Samukelo Zwane, head of product at FNB Wealth and Investment, the choice of how to handle your retirement capital depends on a multitude of factors, many of which will differ according to the type of retirement fund and the financial regulations of the destination country.
A case in point is the recent proposal to levy an exit tax on the retirement interests of South Africans planning to emigrate. While the proposal has been provisionally withdrawn for several reasons, the government has made it clear that it intends to revisit the exit tax in the future. “While your emigration plans may seem like a permanent arrangement right now, nobody knows what may happen in the future, and if you have the opportunity, or inclination, to return to South Africa later in life, possibly to retire here as many other emigrants are doing, a fear-based decision to take your retirement money out of the country now could ultimately prove to be a very poor one.
Zwane said that it’s not just financial costs that need to be considered but also the opportunity cost of moving your local retirement funds offshore.
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