Pre-retirement withdrawals may cost RA investors dearly, Coronation warns
‘Withdrawing early effectively means you are borrowing from your future self over a fixed term at your expected rate of return on your RA investment
Conventional wisdom says that living expenses rise uniformly with inflation, so many financial plans are based simply on that. But analysing the spending patterns of retirees shows us that the data tells a different story.
Read more‘Withdrawing early effectively means you are borrowing from your future self over a fixed term at your expected rate of return on your RA investment
Conventional wisdom says that living expenses rise uniformly with inflation, so many financial plans are based simply on that. But analysing the spending patterns of retirees shows us that the data tells a different story.
Members particularly need to understand pre-retirement withdrawals, and the implications of these withdrawals, including tax and liquidity at retirement.
The Actuarial Society of South Africa urges retirement fund members to check their benefit statement to see whether they will qualify for a withdrawal.
Simply setting an initial low percentage drawdown and hoping for the best is unlikely to result in a stable income in real terms, ASSA finds.
A trend that has emerged over the past three reports is that more South Africans are being forced to retire before they want to.
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