Organization : Old Mutual Life Assurance South Africa
Facility : Plan For Retirement Service
Website : https://www.oldmutual.co.za/personal/retirement-planning
Old Mutual Plan For Retirement Service
** Retirement is that stage in your life when you get to reap the benefits of decades of hard work.
Related : Old Mutual Life Assurance How To Switch To Money Account : www.southafricain.com/9452.html
** You get to spend time on your hobbies, travel or spend time giving back to the communities you care about. To do this effectively, you need to plan and save for your retirement when you’re young.
When to start
When to start saving for retirement ?
** If you’re starting your first job the last thing you want to be thinking about is saving for your retirement which could be 40 or 50 years from now. The thing is, it’s the perfect time to start. The more time you have on your side, the more opportunity your money has to work and grow for you. So, the best time to start saving for your retirement is when you land your first permanent job. The second best time to start is now.
** Saving for your retirement is an important decision. There are various retirement plans you can choose from. In addition, in South Africa retirement annuity and pension fund contributions are tax deductible up to certain limits.
How to save 1 million by age 65*
| Age | Monthly premiums | Total invested | Growth in your investment |
|---|---|---|---|
| 25 | R 178.74 | R 85 796.91 | R 915 000 |
| 35 | R 480.93 | R 173 134.80 | R 826 864 |
| 45 | R 1 381.24 | R 331 497.79 | R 668 502 |
| 55 | R 4 963.82 | R 595 658.84 | R 404 341 |
| 60 | R 12 958.11 | R 777 486.68 | R 222 513 |
** *The purpose of this table is to illustrate the cost of delaying saving for your retirement. Starting early means having to invest less on a monthly basis and enjoying more investment growth.
** The example above assumes a 10% interest rate. The amount that you need to save will differ from the example. Try our retirement calculator to find out how much you need to save for your retirement.
Why save For It?
Why save for retirement?
Expect to live longer :
** With the current advances (not to mention future ones) in technology and medicine you can expect to live longer.
** That means you’ll need to make provision for an additional 20 – 25 years if you are planning to retire at age 65. On the upside you should be debt-free i.e. you don’t have to worry about car or bond repayments and university fees. On the downside you do need to take care of your health. With ageing comes many unwanted ailments.
** Having enough medical cover to keep you comfortable is essential in South Africa. Now imagine reaching your retirement age without having saved adequately and ending up on a state pension of R1620 per month. From this amount, groceries, electricity, utilities and other expenses need to be paid.
How to save For It ?
How to save for retirement ?
You need inflation-beating investments :
** Most times cash is king but not when it comes to investing for your retirement. You want your money to grow at an inflation-beating rate (because inflation is your investment’s number one enemy).
That means investing it in a retirement annuity so that you can benefit from compound interest and growth. Combine that with time (the number of years until you retire) and you have a winning combination. The more time your money has to grow the more you should have when you’re ready to say goodbye to your job.
How much do I need ?
How much do I need to save for retirement?
** How much is enough for retirement in South Africa? The million Rand question, or in most cases quite a few million.
** Most experts put the number at between 70 -80% of your current income.
** So, if you’re earning R40 000 per month then you’ll need between R28 000 to R32 000 per month when you retire.
** To get a clear indication of how much you need to save, try our retirement calculator.
** Actuarial models show that a good rule of thumb is that 12 times your annual salary is likely to buy you a financially comfortable retirement.
** *Peter Doyle, former president of the Actuarial Society of South Africa
Covering all your bases :
** The most tax efficient way to invest for your retirement is to participate (by investing the maximum percentage of your salary that you can) in your company’s pension scheme and/or invest in a Retirement Annuity.
** Other ways of supplementing your retirement savings – once you contribute your allowable 27,5% of your gross remuneration (limited to R350 000) to a pension fund or RA – is by investing in tax free savings accounts, a second property, trading in shares or collecting valuable art works.
Why Old Mutual?
** Old Mutual is over 170 years old which means we’re able to offer you expertise gathered over the years to structure a retirement solution that’s right for you
** We offer you solid, steady returns to help you meet your retirement goals.
** Our fund managers (they’re the ones that invest your money) invest their own money in the funds they manage. Now that’s commitment for you.