Retirement Planning
A period of illness, disability, or job loss can significantly disrupt savings, making risk planning essential. In particular, single pre-retirees need adequate income protection and/or lump-sum disability cover, keeping in mind that they do not have a spouse’s income to
Your post-retirement income may come from several streams: living annuities, pension or provident fund drawdowns, rental income, interest, dividends, and perhaps part-time work. List each source, noting whether it is fixed or variable, and the expected start dates – keeping
While financial projections can model inflation, returns, and drawdown rates, they struggle to anticipate the non-linear costs of ageing. Bear in mind that while life expectancy tables may predict averages, life itself doesn’t follow averages.
Inflation may feel like a distant concern when you’re still earning, but in retirement, it becomes a silent assassin of purchasing power – keeping in mind that even modest inflation erodes the value of your income and savings over time.
Separate from day-to-day healthcare, the potential need for long-term care is a major cost driver. Whether it’s assisted living, dementia care, or full-time frail care, fees can run into tens of thousands of rands per month.
Another mistake is failing to appreciate the impact of investment risk and volatility on income sustainability. Because a living annuity is an investment, your capital is exposed to market movements, and this exposure needs to be managed carefully. Some retirees
While trustees are not personally accountable to individual members in the same way a service provider might be, they do have a fiduciary duty to the fund and its members collectively. If you’re part of an occupational fund, it’s worth
One of the primary attractions of a living annuity is the investment flexibility it offers. Because it is not governed by the Pension Funds Act, the Regulation 28 asset restrictions fall away, and you can design a portfolio without caps
Significantly, the impact of lower earnings leads to reduced access to employer-sponsored retirement contributions, lower levels of group life and disability cover, reduced ability to invest meaningfully, and a diminished ability to benefit from compound growth over time.
In terms of the Long-term Insurance Act, the annuitant may nominate one or more beneficiaries to receive the remaining value of the living annuity on death, meaning that a living annuity is both a tax-efficient estate planning tool and an
