CHOOSING A RETIREMENT INCOME SOLUTION BASED ON YOUR PRIORITIES
It’s critical that you work with a financial adviser to select an annuity product (i.e. one that will pay you an income in retirement) that answers your needs and secures you an income for the rest of your life. Here’s Glacier by Sanlam’s guide to annuity solutions and their strengths and associated risks. Speak to your financial adviser to determine the best solution for your needs.
Understanding different types of risks:
LONGEVITY RISK: The risk that you may live longer than expected and deplete your capital, thereby placing your income at risk.
ANNUITY PRODUCT
INVESTMENT RISK: The risk that investment returns are less than expected, which results in reduced income and/or capital.
PRODUCT STRENGTHS
Guaranteed income
Potential for capital growth through investment
Financial legacy for dependants
INFLATION RISK: The risk that the purchasing power of your income decreases because the level of income does not keep up with inflation.
RISKS ASSOCIATED WITH PRODUCT
Flexible
Longevity risk
Investment risk
Inflation risk
Guaranteed life annuity Yes, if inflation protection option is not selected
InvestmentLinked Living Annuity (ILLA)
The ILLA and ILLI can provide for an income that will keep pace with inflation. However, this is dependent on appriopriate investments in growth assets and an appriopriate level of income taken (not more than guideline)
Dependent on level of income taken
InvestmentLinked Lifetime Income Plan (ILLI)
Flexibility when it comes to investment choice
Combination of the ILLA and ILLI (ILLA portion)
For more information visit www.glacier.co.za. *Please note this is a guide only and investors are encouraged to obtain advice from a qualified financial adviser.
Glacier Financial Solutions (Pty) Ltd and Sanlam Life Insurance Ltd are licensed financial services providers