Historically, clients had to choose between the certainty of a life annuity and the flexibility of a living annuity. Now they can get the best of both. Momentum Wealth has reimagined retirement income planning into a blended product solution supported by a state-of-the-art income illustrator to give clients:
- the flexibility of a living annuity that could give them investment growth;
- the certainty of a life annuity that pays them a guaranteed income for life; and
- guidance to help advisers choose the most suitable solution for clients.
Annuity options when clients retire
A life annuity pays a guaranteed income for life, so it provides a great match for clients’ basic expenses like having a place to live, medical aid, groceries and other regular essential spending, which we refer to as life expenses. However, it’s not flexible, so they may not be able to make spontaneous decisions like paying for a holiday or contributing to a special life event.
With a living annuity, clients can tailor their income by choosing an income level of between 2.5% and 17.5% of the investment value, which they can adjust every year. They also have the flexibility to choose investment components to suit their investment strategy. But, if markets don’t perform as expected or clients don’t strike the right balance between life and living expenses, there may be the risk of running out of money to pay for even the bare necessities.
A retirement income option with the best of both worlds
When clients retire, it’s a balancing act between guaranteed income and flexible income. A guaranteed income removes all the risk but has no market participation, no flexibility and sometimes a lack of being able to leave a legacy. A flexible income could run out or become insufficient, but clients have the opportunity to participate in investment markets and the ability to transfer money to their loved ones upon their death.
Momentum Wealth offers a range of guaranteed solutions to protect your clients’ money against market movements, inflation, and changes in the interest rate. Whatever their investment goals are, we have a range of solutions to meet their needs.
We believe there is a better way for clients to plan and structure their finances when they retire by ensuring a sustainable income in retirement and blending the need for certainty and flexibility.
We have reimagined retirement income planning by enhancing the Retirement Income Option, our living annuity on the Momentum Wealth local platform. Clients can choose to allocate a portion of their retirement money to a component within a Retirement Income Option to provide a guaranteed income for life.
Financial advisers can compare different income scenarios with the help of our income illustrator to guide clients’ decisions about how much they should allocate to the Guaranteed Annuity Portfolio to suit their unique income requirements and circumstances. In this way, you can blend the 2-in-1 unique solution to meet their income needs throughout your retirement years.
Momentum Wealth offers a range of guaranteed solutions to protect your clients’ money against market movements, inflation, and changes in the interest rate. Whatever their investment goals are, we have a range of solutions to meet their needs.
For more information on investment and retirement solutions and how you can bring personalised certainty to your clients’ retirement income planning, visit our website:
https://www.momentum.co.za
Momentum Wealth is part of Momentum Investments and Momentum Group Limited. Momentum Wealth (Pty) Ltd is an authorised financial services provider (registration number 1995/008800/07, FSP number 657). Momentum Metropolitan Life Limited is an authorised financial services and credit provider (registration number 1904/002186/06, FSP number 6406). The Retirement Income Option and the Guaranteed Annuity Portfolio are life insurance products, underwritten by Momentum Metropolitan Life Limited, a licensed life insurer under the Insurance Act and administered by Momentum Wealth (Pty) Ltd. The information in this article is for general information purposes and not intended to be an invitation to invest, professional advice or financial services under the Financial Advisory and Intermediary Services Act, 2002. Momentum Investments does not make any express or implied warranty about the accuracy of the information herein.
