Certainty of retirement income in an uncertain world

Fareeya Adam, head of retail product solutions at Momentum Investments
Fareeya Adam, head of retail product solutions at Momentum Investments

By: Fareeya Adam, head of retail product solutions at Momentum Investments

The main challenge at retirement is to convert savings into a stream of reliable income that will last a lifetime. People who retire have to consider an income level that will cover their immediate income needs, maintain their current standard of living and that will also last for as long as they live.

It has been challenging to achieve inflation-beating returns in recent years and this has resulted in a lot of anxiety among retirees. Volatility in investment markets has highlighted the value of certainty. With the element of certainty as the major benefit of traditional guaranteed annuities, these products have come firmly into the spotlight.

It isn’t surprising since this product line is the ultimate outcome-based solution: the income profile that a client is shown when she invests into a guaranteed annuity is exactly what she will get for the rest of her life.

Aside from the guaranteed income for life, other features are becoming increasingly important in the advice process. Financial advisers know that nothing is more personal than the need of clients to take care of dependants or to leave a legacy. Historically, this has been the area of living annuities, but now the use of guaranteed terms and joint life options are being better understood, and can address those needs.

A 20-year guarantee term is a common choice for clients. It provides comfort to know that even if you do not live for as long as expected, your dependants will continue to benefit from the income for a minimum term.

With joint life annuities clients can provide for their partners because the income is paid for as long as at least one of them is alive.

Another popular option is a product that protects the purchase amount of the annuity, like the Capital Protector from Momentum Investments. With this structured product, the client gets a guaranteed income together with life cover that pays out the initial purchase amount on the client’s death. It is a low-risk way of securing income but also leaving a legacy. Since there are no underwriting requirements, the client’s health status does not affect whether or not she qualifies for the life cover.

Inflation and its effect on the purchasing power of income is well known. Adding either a fixed growth rate or an inflation-linked growth rate can go a long way to protect the real value of a retiree’s income.

We offer among the highest income for all types of annuities. If your clients need certainty of retirement income in an uncertain world, consider our guaranteed life annuity. With our long history of offering longevity benefits, we are your expert partner to take on the risk – so that your clients don’t have to. Because with us, investing is personal.

For more information go to momentum.co.za

The information in this editorial 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. The Capital Protector and Momentum Annuities 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.

Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider. (FSP 6406)


Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services providers and part of Momentum Metropolitan Life Limited.

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