Helping your clients understand the impact of different drawdown rates
When faced with the decision to convert hard-earned retirement funds into a reliable income in retirement, many are still unsure if it will be enough to last and rely heavily on their financial advisers to help them.
A new white paper on living annuities and the impact of drawdown rates, based on a study of 20 000 anonymous living annuitants, has been published by retirement income specialist Just SA.
1 in 3 living annuity clients risk running out of money unnecessarily
While retirees' attention traditionally centers around not wanting to lose capital at death, along with an inherent desire to retain flexibility and defer big financial decisions, we believe financial advisers have an important role to play in helping to reframe the narrative surrounding annuity options in retirement.
Blended living annuities – a just choice for retirees
A surefire way to secure a stable income in retirement is through a life annuity. But the biggest detractors from a life annuity are often the perceived lack of flexibility, as well as the belief that leaving a capital legacy for beneficiaries is not possible.
Historically, the inability to adjust income from a life annuity has led to many retirees self-insuring against running out of money and is the reason why many South African retirees opt for a living annuity.
Risks in retirement are increasing - but you don’t have to tackle them alone
Risks in retirement are not new but may have been exacerbated with the COVID-19 pandemic and its effect on lifestyles. Yet there are some practical steps that you can take to best achieve health and wealth in retirement, regardless of market conditions.
Impact of lower salary increases on retirement savings
This MOONSTONE article is adapted from a recent article by Product Actuary Twane Wessels. She says salary increases have been trending downwards for several years, and the COVID-19 pandemic has further added to the negative growth as many South Africans experienced wage freezes and zero increases. The lower your increases, the lower your contributions to your retirement fund will be, and the less money you have invested to capitalise on any investment growth.
Lower salary increases mean less retirement savings
What effect can a zero percent increase have on your retirement savings? As contributions to employer pension or provident schemes are based on a percentage of your salary, the answer is clear. The lower your increases, the lower your contributions to your retirement fund will be, as well as the amount of your employer’s contribution. And the less money you have invested to capitalise on any investment growth.
With-profit life annuity increases comfortable beat inflation
MONEY MARKETING focused on the benefits of a with-profit annuity in their February digital magazine (page 28). Since its launch in 2015, Just has focused on enhancing the features, transparency and performance of with-profit annuities in South Africa for the benefit of pensioners and advisers. With-profit life annuities offer retirees an income for life, which will never reduce regardless of what happens to investment markets or how long a retiree lives.