Continuous changes to the South African labor market, growing unemployment, and economic and social factors are wreaking havoc with investors’ retirement plans.
Given the flat investment market of the past five years, South Africans who are currently retiring are likely to find their assets worth about 15% less than they would have been in normal investment conditions, says Deane Moore, CEO of retirement income specialist JustSA. This is based on an average return of 6.5% per annum over the past five years in South African balanced funds.
“In normal investment markets, people would expect CPI + 5 percentage points per annum from balanced funds,” he says. With CPI at around 5% per annum over the last five years, it means people would have expected investment returns of 10%.
Of course, the local retirement landscape has also changed fundamentally in the past two to three decades – defined benefit funds have shifted to defined-contribution funds, placing the risks on fund members and not the company that employs them.
This means investors have to shift their perceptions around retirement planning and should now see themselves as the trustees of their own retirement plan, says Sandy van der Zanden, wealth manager at Anchor Capital.
And they must ensure that such a plan is “realistic and implementable”.
“People need to work out how much capital they require to create an income they are comfortable with, and apply some level of understanding of how long they expect to live.”
Several investment vehicles that can form the basis for future income streams are available. However, there is often an imbalance between what people have built up and what they should have built up, says Peter Harten, certified financial planner with BDO Wealth.
The accident
この記事は Finweek English の 10 October 2019 版に掲載されています。
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この記事は Finweek English の 10 October 2019 版に掲載されています。
7 日間の Magzter GOLD 無料トライアルを開始して、何千もの厳選されたプレミアム ストーリー、9,000 以上の雑誌や新聞にアクセスしてください。
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