10 important considerations when choosing a retirement income solution | Justin Nkhata

There are several income solutions available to choose from when you retire, each meeting different requirements. The two traditional ones that are currently used to provide retirees with an income from their retirement savings are a guaranteed life annuity and a living annuity.

However, when it comes to choosing a sustainable retirement income solution that will allow you to retire with confidence, there is no one-size-fits-all solution, and managing the retirement income stream requires a careful evaluation of your specific needs, circumstances and concerns. Below is a list of 10 factors and questions to consider when choosing your retirement income solution.

1. Longevity protection: Will my retirement savings last as long as me?

2. Capital legacy: Will my dependants receive an inheritance when I pass away?

3. Income flexibility versus a secure income level: Will I be able to choose my desired level of income during retirement?

4. Income legacy: What will happen to my dependants if I die sooner than expected?

5. Providing for my spouse: Will my spouse still receive an income after my death?

6. Investment flexibility: Will I be able to choose where my money is invested and change my insurer?

7. Exposure to investment risk: How will market movements impact my capital?

8. Liquidity: Will I be able to access my money in case of emergency?

9. Anticipated impact of inflation on income: Will my income be able to keep up with inflation?

10. Tax: How will tax impact my retirement income?

Before choosing your combination of retirement income solutions, it is highly advisable to consult an appropriately accredited financial adviser regarding your unique circumstances and needs.

Article by:

Justin Sinani Nkhata | Financial Planner

079 618 1510 | justin@stratabluestar.co.za