A new study highlights three possible scenarios for retirees’ income expectations in South Africa.
The results of the latest independent tracking study commissioned by retirement income specialist Just SA revealed that a vast majority of South African pensioners are drawing an unsustainable rate of monthly retirement income.
Despite the study showing a positive increase in average savings, the actual amount saved equates to around 10x respondents’ average annual income, falling way short of the 25x figure that has been suggested by external research. “This is because many people underestimate how long they will live , while some admit to not having done any retirement calculations at all.”Looking at the stated retirement income requirements from the tracking study, Ladewig says there are three possible scenarios or zones for pensioners invested in living annuities.
Couple B are needlessly drawing an unsustainable rate from their living annuity and could reduce their risks by considering a blended annuity solution. A blended annuity will allow them to create a safety net and guarantee a portion of their income by investing part of their capital in a life annuity portfolio.
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