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Retirement income planning

The long-lingering ghosts for pensioners of the Covid-19 virus and the kleptocracy regime

Bruce Cameron says "The ghosts of the latest [market] events are going to be long-lasting. Investment markets are going to be volatile. You can expect increases in taxes, you can expect inflation or deflation and you can expect less income in the years ahead. It is best to take action now." Read the full DAILY MAVERICK article. 


How to manage your living annuity in uncertain times

"If you cannot draw a reasonable level of income, you take on increased longevity risk and investment risk, and therefore increased risk of failure in a living annuity investment. In this case, it’s worth considering transferring some or all of the risk to an insurer by purchasing a guaranteed annuity," says Shaun Duddy, Senior Manager in Product Development at Allan Gray in PERSONAL FINANCE


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.


COVID-19: Tips for retirement

NETWERK24: If there is one lesson that living under lockdown has taught us, it’s that we are able to survive on less. Lockdown has afforded a timely opportunity to understand what regular spending can be considered essential and how this is impacted during the time of COVID-19. Twane Wessels says this is especially important for those in or approaching retirement, who must ensure that their retirement income is able to sustain them for life.


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]


What if I’m about to retire and my savings are low?

If you are within about five years of retirement and your savings have taken a hit with the recent market falls, there are some things you need to think about, writes Laura du Preez in a recent SowetanLIVE article featuring Just CEO, Deane Moore.


How to sustain your pre-crash retirement income

Life annuity rates have increased by 10-15% since the beginning of the year, which offsets the reduction in market values most people in or close to retirement have experienced in the recent market crash. In other words, you’re currently able to get a higher income from each Rand of your retirement capital if you invest it in a life annuity today than you were three months ago – in fact 10-15% higher. However, this window of opportunity won’t last forever.


The dichotomy between what pension scheme members want and what they get

A regular contributor to the DAILY MAVERICK, Bruce Cameron says: "Most living annuity pensioners had already received a serious body blow even before the virus and the downgrade of South Africa’s debt, with many already having high drawdowns. Despite this, 90% of South African pensioners want living annuities on which to retire, while at the same time research undertaken by Sanlam and Just SA finds that 87% of retirees want security of income." 


What should investors do when unit trusts have lost across the board?

BUSINESS DAY reports that almost every asset class is showing severe losses for the quarter to date and asset managers are calling March an unprecedented month for investments as concerns on the effect of the coronavirus on economies around the world spread. Good news for pensioners is that the cost of purchasing a guaranteed income for life has gone down by almost as much as the fall in value of balanced portfolios, says Just CEO Deane Moore.


Does your retirement solution withstand the volatility test?

Risk management in retirement is key to helping a pensioner sustain income for life – to cover their essential expenditure and to draw more in the early years when they are more active. The COVID-19 market crash is exposing some shortcomings of outdated risk management strategies that have relied purely on investment tools to tackle all risks in retirement. Many pensioners invested in old-style living annuities are seeing their drawdown rates rise and are consuming capital that won’t be there to benefit from any future market recovery.