Are you ready to retire?

Preparing for retirement means knowing how much is enough for retirement in South Africa, how much you will be taxed on your retirement withdrawals and taking steps to ensure that you have a reliable source of income that will last you for the rest of your life.

In the years before you retire you need to consider what your income needs are going to be post retirement, what retirement capital is available and what the payout options are at retirement. Use the free online retirement calculator to help make the right decision. Choose from the retirement funding solutions that best suit your needs, whether you prefer to invest online or via a financial adviser, and the lifestyle you'd like during this next chapter of your life.

Post-retirement Investment Solutions:

Income Annuities

An income annuity is a financial product that you buy with your retirement and pension fund savings when you reach your retirement age. It is designed to provide you with a regular or monthly income during your retirement years according to your personal needs. There are two types of annuities: Conventional Annuity and Living Annuity.

A Conventional Annuity

In South Africa, a conventional annuity provides an income for the rest of your life (or you and your partner’s life). Your income will stop if you pass away unless you have a joint annuity which comes to an end when the last surviving spouse passes away. Alternatively, you can choose a guaranteed income period that assures you an income for a specific period, and pays out regardless of whether you live or die during this time. After this guaranteed income period, the income will continue until you pass away, at which point it will stop. This is called a guaranteed or conventional annuity.

To help counter the effects of inflation (the rising cost of living) you can choose to have your monthly retirement income increase over time. But keep in mind that a higher escalation rate will mean a reduced starting income. There is a capital preservation option which preserves the initial retirement capital or a lesser amount chosen by you through a life policy, so that when you pass away the capital gets paid to your beneficiary.

Living Annuity

The other type of annuity is called a living annuity which is linked to the market’s performance. Here, your capital is invested and you decide once a year how much of your investment you need to draw, be it a fixed rand amount or expressed as a percentage (within some limits). It’s important not to draw too much income at the start, so that you do not run out of money as you get older. You choose which funds your capital is invested in, based on your risk appetite, time frame and investment profile, determined through proper analysis and consultation with your financial advisor.

When you pass away, the remainder of your capital can be paid out to your beneficiaries.

What retirement solutions does Old Mutual offer?

Old Mutual offers the complete range of pre- and post-retirement solutions to meet your specific lifestyle needs and circumstances and is a specialist in making retirement income options work for you.

Guaranteed Income

Old Mutual offers Max Income Bonus Escalation Guaranteed Annuity. This is a guaranteed monthly income with annual increases from bonuses, depending on market performance. This helps you by protecting the purchasing power of your income against inflation.

Market Linked Income

Old Mutual offers a Living Annuity invested in Old Mutual’s Absolute Smoothed Growth Fund. This is a market linked income, but without the highs and lows associated with market fluctuations. The smoothing mechanism reduces short-term ups and downs in market movements. This ensures a smooth increase of income with no sudden changes to your income and your lifestyle if markets suddenly become volatile.

This option is available on both Old Mutual’s Fairbairn Capital Retirement Income Plan and Max Investment’s Income Investment Funded Income.

To demystify the world of retirement income options, ask a financial adviser to explain the various options that are available to you, so that you can choose the retirement income investment that suits you best.

Speak to your Old Mutual adviser or broker today, call 0860 60 60 60 or complete the call-me-back form on the right of this page.