“Often, when you think you’re at the end of something, you’re at the beginning of something else.” Fred Rogers
Retirement planning 101
If you're part of a pension or provident fund or have a preservation fund and/or a retirement annuity, you can withdraw up to one-third of your investments to use as you wish. The remaining balance must be transferred to a compulsory retirement product, including a Living or Life Annuity. (Be aware that the provident and provident preservation fund rules changed in March 2021. Please discuss how this change impacts your options with us.)
Post-retirement planning lingo
Advantage:
Disadvantage:
The income from a life annuity is taxed at your marginal tax rate.
Advantages:
Disadvantages:
The income from a Living Annuity is also taxed at your marginal tax rate, but at the source by the provider. You can specify the tax rate so that it aligns with your marginal tax rate – a nifty way of simplifying your tax affairs.
Embracing life in retirement
Understanding and planning your post-retirement investment options is crucial, as is preparing for a fulfilling retirement. Initially, many experience a honeymoon phase, enjoying the newfound freedom. However, as retirement sets in, some may feel a lack of purpose. Here are some ideas to assist you living your best retirement life.
The bottom line
Knowledge is power when making significant decisions about retirement. Gather as much information as possible and understand your risk tolerance and ability to live within your means. While you’re at it, consider creating an agenda that prioritises activities that bring you joy.
Feel free to reach out if you’d like to discuss any of the above. We’re here to help you achieve an affordable and meaningful retirement.
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