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Blended annuities

Benefits of Blending

With the cost of living constantly increasing, it’s very tempting to increase your drawdown rate when your anniversary rolls around. However, this can be very detrimental to your overall financial well-being. Read more on EBnet


What to look for in an annuity product

Just SA’s Bjorn Ladewig discusses choosing an annuity product at retirement with Simon Brown on MONEYWEBNOW [Audio at 13m30s] 


The Benefits of Blending

In their August magazine, FA NEWS published an article outlining the relatively new annuity option that enables a higher sustainable drawdown with less associated risk. When comparing current market solutions, Just shows how pensioners could increase their monthly income by 25% by purchasing a new-generation with-profit life annuity, rather than a traditional living annuity. However, in return for this higher lifetime income, they do need to forego the flexibility of how much they can draw. Read the full article for more detail.  


Change your living annuity, not your drawdown rate

Just features in the Winter edition of SILVER DIGEST (page 22) and covers some options to consider to make your retirement income more sustainable in an environment where current regulations do not allow you to split your living annuity after retirement.


Is the annuity debate shifting back to life, from living?

"Reintroducing the with-profit annuity: There is another type of life annuity that is making somewhat of a comeback at the moment, namely the with-profit annuity. Commentators single out Just SA, Liberty, Momentum, Old Mutual and Sanlam as the main life insurers in the with-profit segment," says FA NEWS


About to retire? Take great care

The next DAILY MAVERICK op-ed by Bruce Cameron says by adding five years to your working life, you can improve your retirement savings by about 20-30% and reduce the time you will spend living off your savings. Just CEO Deane Moore provides an example of how delaying retirement can help you.


Hybrid annuities: Retirement fund defaults may be the cheaper options

Bruce Cameron's latest DAILY MAVERICK op-ed says: "Those retirement funds offering default annuities, which include the hybrid option, are probably offering you the best retirement option, particularly if you have not saved enough for retirement."


Hybrid annuities: Some of the choices

“This [a blended living annuity] provides the best of both worlds allowing for the important aspects of the living annuity, with its legacy, income flexibility and market participation; and the with-profit annuity with its income security that ensures your income if you die, even well into the future” says John Anderson, head of research at Alexander Forbes in Bruce Cameron's most recent DAILY MAVERICK op-ed.


Change your living annuity, not your drawdown rate

As part of its response to the COVID-19 crisis, National Treasury announced a change in living annuity drawdown restrictions where pensioners will be allowed to temporarily adjust their drawdown rate to as low as 0.5% or as high as 20%, even if it is not the anniversary date of the living annuity. But current market conditions present a unique opportunity to improve the sustainability of your retirement income. And this does not require you to reduce your drawdown rate. To take advantage of this opportunity, you may want to consider some choices. 

Hybrid annuities: Something to consider when choosing your pension

“Hybrid annuities will help to optimise the pension benefits to balance the competing objectives pensioners face. Hybrid annuities provide a sustainable income on the one hand, versus having flexibility for unforeseen events and the ability to leave an inheritance on the other,” says John Anderson in Bruce Cameron's DAILY MAVERICK op-ed on hybrid (blended) annuities.

[Related article: HYBRID ANNUITIES: SOME OF THE CHOICES]


Life annuity sales soar amid lockdown losses

Amid the market instability brought on by COVID-19, retirement income specialist Just has reported record demand for life annuity solutions from South African pensioners looking to lock in an income for life. Sales for life annuities have doubled relative to 2019 since the COVID-19 market crash in mid-March 2020. CEO Deane Moore attributes this growth to attractive annuity rates and pensioners seeking to de-risk their retirement income in an unpredictable financial climate.


Alternative ways to structure a pension

In his latest op-ed for DAILY MAVERICK, Bruce Cameron says that the best way to overcome the disadvantages of living annuities and guaranteed annuities is to use both. This becomes even more important with COVID-19 and the downgrading of South Africa’s credit rating.