If you are reaching your retirement age later this year, you will be faced with various decisions which could influence the rest of your life.
A few of these decisions are:
Do I have the option of converting any group life cover without underwriting
If yes, do I need this cover and can I afford it all or should I take a reduced amount
Whether to take your full 1/3 cash lumpsum or less if it is not totally free of tax
How much income you require from your retirement benefit, be it only from your 2/3’s pension or from a portion of your reinvested 1/3 cash lumpsum too
Whether to invest the remaining 2/3’s of your retirement fund in the form of a traditional annuity (with your employer or an outside issuer) or in the form of a fund-linked living annuity
What sort of traditional annuity to opt for. One with a guaranteed term or a nil guaranteed term. One with a spouse’s pension after your death or no spouse’s pension. What % of your full pension should it be
Which unit trust funds, wrap funds or direct instruments should you use in your living annuity portfolio, if you go that route, in order to achieve your income and capital growth goals.
What level of income to start with at the outset of retirement. As much as you wish, or as much as your financial advisor advises you to opt for after taking the Actuarial Society of SA’s calculations into consideration.
How do I utilise my discretionary investments to augment my retirement lifestyle
The amount of time and the depth of the discussions you have with your advisor as well as with your spouse several years before reaching retirement age, which should deal with your retirement goals and objectives, will determine the degree of satisfaction that you will glean later in life from your hard-earned retirement savings.
Don’t delay to make an appointment with your financial advisor to discuss what your lifestyle in retirement should look like. Give yourself time to shape your lifestyle after employment, otherwise you may not be able to look forward to a comfortable retirement when you deserve one.