With lacklustre local stock returns, questions about the creditworthiness of government debt and record-high offshore markets, those close to retirement may be left with daunting choices. Amanda Visser spoke to retirement specialists on behalf of FINWEEK about the options. [Subscription required]
Sustainability
The long and short of longevity: a woman’s perspective
Just's Twane Wessels and retirement specialists Lynda Smith (50 Plus Skills) and Jennifer Nedzamba CFP® (Netto Invest) agree that many women have not yet grasped the concept of longevity fully, and as a result have not planned adequately for retirement. In light of their shared experiences and expertise, and to help create awareness, they offer their top considerations for women approaching retirement.
Don’t rush investment decisions in times of uncertainty
It’s natural to feel a certain amount of panic during any crisis, let alone a global pandemic. But rushing into investment decisions through panic is always a bad idea, even if your nervous system is screaming at you to act. Click to read the full article by Bjorn Ladewig, Longevity Actuary at Just.
Life stages and life spans are changing – Financial Adviser has critical role to play
MOONSTONE reports that while the COVID-19 crisis initially provoked anxiety, Just CEO, Deane Moore reaffirmed that a retiree’s approach to retirement should remain the same, regardless of market conditions. When planning for retirement, he urged participants to think about their retirement savings in two parts – needs and wants. He then identified three sensible steps to follow to best manage and protect retirement income.
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.
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.
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.