Reimagining retirement planning

Retirement planning has traditionally been approached with limited options, often leaving people uncertain about their financial security.

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Fareeya Adams

Momentum Wealth has reimagined retirement for South Africans through income solutions aimed at empowering people to confidently plan for retirement.Innovation begins with thinking differently about how we use existing resources to improve our lives. Our latest initiative involves the creation of a new asset class designed to significantly enhance income planning during retirement. We aim to provide people with a solution that offers the protection of future income streams, opportunities for capital growth, extended income sustainability, and effective management of inheritance needs.

Differences between a life annuity and a living annuity

Traditionally, people had a choice between a life annuity and a living annuity, each with its unique features and rules. Even if people decide to use some of their retirement money to purchase a life annuity and some to invest in a living annuity, they may end up with two separate retirement income products that can make it difficult to manage their income during retirement. There is a better way for people, together with their financial adviser, to plan and structure their finances when they retire by blending their needs for certainty and flexibility.

Enhanced Retirement Income Option

We enhanced our living annuity product, the Retirement Income Option (RIO) on the Momentum Wealth platform to help people structure their retirement income plans better. They are no longer faced with the choice between the certainty of a life annuity and the flexibility of a living annuity – they can have the best of two worlds in one retirement income solution.

By allocating a portion of their retirement money to a life annuity component within their living annuity, people can personalise their income plan by deciding:

  • how much of their retirement money they want to use to cover their essential ‘life expenses’; and
  • how much they want to use for their more flexible ‘living expenses’.

The Guaranteed Annuity Portfolio (GAP) pays a guaranteed income for as long as a person lives, providing much-needed income certainty many people require in retirement. At the same time, they have the investment flexibility to benefit from potential growth from investment markets and the possibility to leave an inheritance, all in one living annuity.

The Guaranteed Annuity Portfolio is a life annuity, which is available as an optional investment component to clients starting a new Retirement Income Option or who already have a Retirement Income Option.

Expert guidance with a state-of-the-art tool

At Momentum Wealth, we are committed to empowering financial advisers with the tools and resources needed to help guide their clients towards optimal retirement solutions. With our state-of-the-art income illustrator tool, advisers can present clients with a range of income scenarios, helping them make informed decisions based on their unique needs and circumstances. By partnering with financial advisers, we ensure that clients receive personalised guidance and support every step of the way.

This innovative tool goes beyond simply explaining the GAP and RIO. Advisers can use the income illustrator to:

  • Model different scenarios: Simulate personalised income projections based on retirement goals, risk tolerance, and life expectancy. See how the combination of guaranteed income and potential growth from the market-linked portion of the living annuity can impact retirement income over time.
  • Plan for changing needs: Retirement is a journey. This tool helps advisers visualise the income stream and adjust it based on potential future needs, such as increased medical expenses.
  • Make informed decisions: With clear data visualisations, advisers and their clients can understand the trade-offs between guaranteed income and potential growth, to be able to choose the most suitable structure for various circumstances.

“By blending the best of two worlds – the income certainty of a life annuity and the investment flexibility of a living annuity – we are partnering with financial advisers to help clients make better decisions about structuring and implementing suitable income solutions when they retire; and optimally manage their income during retirement to cater for changing income needs.” – Fareeya Adam, Head of Annuities, Momentum Investments


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