WE A LT H
YOUR RETIREMENT INVESTMENTS AFTER COVID-19 BY WERNER VLOK, BUSINESS DEVELOPMENT MANAGER AT GLACIER BY SANLAM
I
nvestors have more control
smart move. Markets are showing
reducing the income taken will give
over their finances than they
signs of recovery and investors feel
your capital time to recover.
think. With the right advice and
more comfortable investing now
Rather than trying to reduce the
solutions, there is much that they
than they did a few months ago. By
income taken, a better option may
can do to improve their current
continually contributing through
be to combine traditional income
– as well as future – situation. In
the ups and downs of the
solutions to include a guaranteed, as
this article, we look at the impact
market, you also get
of COVID-19 on those saving for a
the benefit of rand
secure retirement, as well as how
cost averaging.
those who are currently in the
Not only will
process of retiring are affected, and
you continue
consider some of the ways retirees
building your
can improve their current situation.
capital base and reaping
well as a market-linked, portion. We’ve seen interest rates on bonds increase, making the guaranteed portion more attractive.
ADVICE COULD MAKE ALL THE DIFFERENCE
THE LEAD-UP TO RETIREMENT
the benefits
While we always advocate not
of compound
panicking, we acknowledge that
interest on your
those who are on the verge of – or
savings, but you
in the process of – retiring, have
will also continue to
immediate and valid concerns and
enjoy the tax deductions
combinations thereof, as well as
not enough time before retiring to
offered by an RA. Remember that
rules and legislation pertaining to the
make up the losses they’ve suffered.
your retirement benefit saved in a
investments, can be bewildering to
Our first suggestion would be to
When it comes to retirement income solutions, we acknowledge that the number of different solutions, and
retirement fund is protected from
an investor. We therefore urge you to
delay retirement if you can. If this is
creditors and estate duty is not
speak to a licensed financial adviser
not possible, perhaps your skill-set
payable on the benefit either.
before making any critical financial
allows you to offer a service that will
decisions, especially when it comes
INVESTMENTS AND INCOME AFTER RETIREMENT
to retirement income. Some product
– without putting any of your savings at risk to set up a business that may,
Retirees with a living annuity
not. In some instances, it is possible
or may not, succeed. Doing this
currently have the opportunity
to generate a higher income for
will not only give your capital time
to take advantage of the relief
yourself by combining solutions. Your
to recover, but will also mean that
offered by National Treasury, to
adviser will be able to customise your
you’ll be drawing an income from
end-September. We urge retirees
income stream in retirement to your
your capital for a shorter period of
to remember, though, that an
specific needs.
time. If drawing an income is the
increase in the income taken will
only option, try to keep the income
have an effect on the long-term
adviser to your list of financial non-
for the first couple of years as low as
sustainability of the income as you’ll
negotiables. •
possible to protect capital.
be drawing this higher income from
bring in an income for a while longer
If you have a few years to go until
selections can be reversed, others
Add an annual meeting with your
a lower capital amount. The higher
This article first appeared on
retirement, continuing contributions
income will also potentially attract
www.moneymarketing.co.za
to a retirement annuity (RA) is a
higher tax. However, if at all possible,
on July 10, 2020 WWW.SILVER DIGEST.CO.ZA
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