10 things people often get wrong about the two-pot retirement system
Old Mutual’s learnings about what people know or expect, based on its interactions with customers and advisers.
#retirementplanning
Pre-retirement savings withdrawals ‘make sense in certain cases’
Preservation must be encouraged, but the reality is that a retirement fund is many South Africans’ only source of savings, says Alexforbes.
Pre-retirement withdrawals may cost RA investors dearly, Coronation warns
Withdrawing early effectively means you are borrowing from your future self over a fixed term at your expected rate of return on your RA investment.
People’s expenses change in retirement. Shouldn’t their income too?
Conventional wisdom says that living expenses rise uniformly with inflation, so many financial plans are based simply on that. But analysing the spending patterns of retirees shows us that the data tells a different story.
Dispelling misconceptions about the two-pot retirement system
Members particularly need to understand pre-retirement withdrawals, and the implications of these withdrawals, including tax and liquidity at retirement.
No savings pot withdrawal in September if your balance is less than R2 000
The Actuarial Society of South Africa urges retirement fund members to check their benefit statement to see whether they will qualify for a withdrawal.
Research points to the need for regular reviews to ensure a living annuity will last
Simply setting an initial low percentage drawdown and hoping for the best is unlikely to result in a stable income in real terms, ASSA finds.
Few bright spots in 10X’s latest Retirement Reality Report
A trend that has emerged over the past three reports is that more South Africans are being forced to retire before they want to.
Unlock your potential in financial planning through MBSE
2023 top achiever Devon Lumley shares insights into online learning, self-discipline, and goal setting to maximise students’ Moonstone Business School of Excellence experience.
