Now that your tax return has been submitted, it is time to look at your financial well-being.
May taxpayers were just too happy to press the button and submit their tax returns so they can be free of worry for another year. But there are other things to do now, an expert says.
The end of tax season brings a collective sigh of relief, Thinus Marais, financial adviser at Momentum Financial Planning, says. “You completed all the necessary forms, hit ‘submit’ and either cheered a refund or grumbled at a payment.
“Although this marks the finish line of your annual financial duties in most people’s opinion, in reality it should be the starting point for the most important financial exercise of the year.”
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Tax returns force us to look back, but now we must look to the future
Marais says taxes force us to assess our money situation, but they only provide a retrospective view.
“The real, strategic value lies in interpreting what those numbers mean for your future. The end of tax season is the perfect prompt to schedule a full financial reality check with your financial adviser, a necessary step to ensure you turn compliance into long-term wealth.”
Tax filing is a tactical exercise as it checks the box for Sars. However, financial planning, is strategic, Marais points out. “When you rush through tax season, you often overlook critical, long-term decisions that can cost you far more than a missed deduction.”
These include insurance gaps and salary shifts, missing retirement contributions and forgetting to add a beneficiary.
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Insurance gaps and salary shifts
Did your income change over the last year? Perhaps you received a promotion, started a side hustle, or switched jobs. Your tax forms clearly show the new income, but did you adjust your protection?
Marais points out that the mistake many people make is failing to update their life and disability cover. If your income increased by R20 000 per month since your last review, your current cover may be dangerously inadequate.
“A major life event would leave your family receiving a payout that reflects your old, lower income, completely derailing their financial security. Your adviser will use your latest tax data as proof of new income to ensure your cover matches your actual lifestyle.”
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The retirement contribution miss
Tax season often leads to a last-minute scramble to maximise retirement annuity contributions to secure a deduction, but Marais says this rush often misses the bigger picture, including whether your contributions are properly structured.
“Are you maximising the tax-free growth benefits? An adviser will help you analyse your annual income and optimise your contributions early in the new tax year, ensuring you hit the maximum possible tax deduction strategically, rather than just nervously making a lump sum payment on the deadline.
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The forgotten beneficiary
A life change, such as getting married or having a child is central to your tax status, Marais warns. “Yet, these events are often ignored in the context of your broader estate. Forgetting to update beneficiary nominations on your retirement funds, life policies, or even your will is a common mistake.
“Tax data reminds you of life’s changes, but only a full review with your adviser will confirm that the right people will receive your assets should the unexpected occur. An outdated beneficiary nomination can lead to legal battles and delay essential funds for your loved ones.”
Tax time is a necessary process, but a financial check-in with your financial adviser is a strategic opportunity, Marais says.
“You did the hard work of organising your numbers. Now, let your adviser provide the 360-degree view that prevents costly mistakes and ensures your hard-earned money is perfectly aligned with your personal goals.”
