That’s like asking where to dig for gold if you’re not a geologist. It’s what you might call the $64 000 question. The answer is that it depends on many things:
What are you investing to achieve?
For how long do you think you want to invest for?
Do you want to inv...
Good question. The simple answer is: when you have enough money to look after you for the rest of your life. Should is a bad choice of words. It might be better to ask: when can I retire?
Some people retire without enough capital to live off indefinitely. In fact most do. A lot do so due ...
In most retirement fund handbooks there is reference to members making sure that they buy the right annuity (pension) when they retire. It’s a bit like saying “make sure that you marry the right spouse”. There is a great deal more to this than meets the eye.
There are two main types of conventional pensions namely With-Profit and Non-Profit. Their supplementary features make for a number of permutations so it is important to understand them clearly as the Devil is in the detail.
Features of With-Profit Pensions
The idea of a living standard is one that is often talked about but has never really been quantified. We have devised a simple way to do it. The process is relatively easy but it does require your understanding your salary or cost-to-company.
Essentially your living standard minus what you: ...
If we go back to the two tests for a pension i.e.
Does it solve my longevity problem; and,
Will it keep my pension fairly safe from inflation
Refer to the article on Retirement Risks
Let’s start with retirement and the longevity problem (or living too long)
There is no particular rate at which you should draw income from a living annuity each year. As long as you don’t draw less than 2.5 percent of the capital and not more than 17.5 percent of the capital you are within the legal limits. (These drawing rates can be changed annually i...
When you retire you are able to take certain amounts of cash from your retirement fund or funds.
From a pension fund or a preservation pension fund you may only take a maximum of one-third in cash. This also applies to a retirement annuity fund at retirement. The remaining amounts, ...
That’s really important. There are several schools of thought on this issue.
In America they have what is called the four percent rule. This means that your capital, at retirement, should be able to produce an income of four percent per year that will be sufficient to retire on. The idea ...
This depends on a number of things. But there is a big question that must be asked: If you take cash out can you invest it as well as you might had it stayed in a pension product? If the answer is yes then you are fine but a lot of people take the cash out at retirement and then don’t know what t...
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