According to the most recent Sanlam Benchmark Symposium survey, 51% of retirees can’t make ends meet. About a third don’t have enough funds to cover their medical expenses. Also, about a third entered retirement in debt, and more than of half of retirees still have to support adult dependants. As a result of these financial pressures, 61% simply can’t afford to save for a ‘rainy day’ fund, leaving them unprepared for unexpected expenses. These statistics show that for many South Africans, retirement is a constant battle for survival.
Against the backdrop of the recent massive declines in capital values, it is particularly important to focus on income-drawing clients, and specifically those whose retirement savings are connected to the fortunes of capital markets.
51% of retirees can’t make ends meetSanlam Benchmark Symposium survey
Understanding the key risks that befall those retirees invested in living annuities, is extremely important in assisting them to reach their financial goals. The two main risks are that their capital doesn’t last for the full duration of their retirement, and sequencing risk - the risk that the markets are unfavourable shortly before, and in the few years right after retirement, which can influence their capital and income significantly. So how do we make retirement savings last long enough?
During a time as challenging as the one we currently find ourselves in, a traditional approach to portfolio construction for income drawing retirees is just not going to be enough. A new way of thinking is required when it comes to navigating retirement.
New times, new thinking
At Glacier Invest, we have adopted a progressive new approach to living annuity portfolio construction. We use contemporary investment instruments and apply an asymmetrical approach. Our precision portfolios target specific returns to match drawdowns while mitigating downside and capturing upside to give your retirement income drawing clients more certainty around income withdrawals.
Put your clients’ retirement in the hands of experts with the Glacier Invest Real Income Solutions for Living Annuities.