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A new approach to living annuities

One of the biggest risks pensioners face is running out of money.  A lack of retirement savings and depressed investment markets have left many pensioners and financial advisors anxious about the future. 

Q: How should pensioners invest their capital and what level of income can they afford to draw? What exposure to offshore equities should be considered and what is the significance of volatility on ensuring a comfortable retirement?

Investec Asset Management's in-house research introduced some new ways to approach this age-old problem.

‘Watch Jaco van Tonder outline our findings and present a new approach to living annuities.’

Typical situation facing advisors and pensioners today

Living annuity moneypot

Many investors simply haven't saved enough to begin comfortably drawing an income of less than 5%.

Living annuity piggy bank

Some pensioners are drawing an unsustainable level of income and risk running out of money.

Living annuity birthday cake

Pensioners face a unique investment challenge, balancing long-term income and growth needs.

How should investors approach living annuities?

In the following series of articles we unpack the living annuity conundrum, looking at the unique investment case pensioners face and how, through our research, we believe these needs can be addressed.

Why volatility matters for living annuity investors

The value of active management and the impact of volatility on income.

Read more

Why a flexible income strategy

Choosing the right level of income annually represents a unique opportunity for investors to manage their risk of ruin.

Read more

The importance of growth assets

Finding the right balance between volatility and growth is crucial. Find out how with us.

Read more

An active solution

The combination of strong long-term real returns together with lower portfolio volatility can make a significant difference to income-producing portfolios.

Read more

Bucket strategies and living annuities

Are ‘bucket strategies’ a good solution for advisors constructing living annuity portfolios?

Read more

What are the main pitfalls of bucket strategies?

How these strategies introduce portfolio management risk to living annuities.

Read more

Redefining old age – how to manage living past your sell-by date

‘Watch Sangeeth Sewnath and Professor Harper discuss managing living past your sell-by date.’

Watch the video

The value of rand-denominated offshore feeder funds

How a rand-denominated offshore feeder fund' can help living annuity investors achieve better outcomes.

Read more

Redefining old age – how to manage living past your sell-by date

At our GlobalSelect Investment Conference, Professor Sarah Harper (Professor of Gerontology, University of Oxford) discussed the impact of living longer on the world of work and retirement.

The combination of people remaining mentally and physically healthier for longer, combined with the job skills required for the knowledge economy, will profoundly influence future retirement strategies. Advisors must prepare their clients for a new retirement mindset and address critical decisions as they transition out of the workforce.

‘Watch Sangeeth Sewnath and Professor Harper discuss managing living past your sell-by date.’

Ask us a question

Got a question on the research? We’d love to hear from you. Submit your question below and one of our client managers will be in touch.

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