The success of any living annuity depends on:
- The size of the initial amount invested (from you retirement annuities, pension, provident, and preservation funds) in the living annuity.
- The investment return achieved by your chosen underlying investments.
- The annual income expressed as a drawdown rate.
- The underlying investment costs.
WHY INVEST IN A BOLD LIVING ANNUITY?
The benefits of a living annuity
Living annuities allow you to adjust your retirement income each year so as to keep up with inflation. They also allow you to choose from a wide selection of funds so you always have access to the top performing ones. But in order to take advantage of the potential to gain higher investment returns, you need to take higher risk with your choice of funds. This is something most retirees are uncomfortable with as they are worried about losing it all. But with Bold Living Annuity, you can protect the returns that your choice of fund mix delivers, so providing the comfort to invest in higher return potential funds.
Guarantee your returns with Bold Living Annuity
Bold Living Annuity is SA’s first living annuity that gives you the freedom to invest your retirement savings in your choice and mix of funds, including those that offer higher expected returns, with a Liberty return guarantee. This return guarantee protects 80% of your total aggregate (combined) return from the start. This return guarantee applies to your income withdrawals and at the end of the five year guarantee period.
As your return increases, so does our return guarantee
On the first day when your return is zero the most your return can drop is 20%, because your return guarantee protects 80% of this total aggregate return. This total aggregate return is measured at every three month interval: if the aggregate return from your chosen mix of the underlying funds reaches a new high, then the Liberty return guarantee level increases with it. So, for example, a total aggregate return high of 25% means a return guarantee of no negative returns and then a high of 50% means a return guarantee minimum of 20%.
Flexibility when you need it most
Bold Living Annuity gives you the flexibility to choose from 190 funds managed by 15 investment managers. With such a wide range, including offshore funds and trackers, you can switch your funds at any time without losing or affecting your Liberty return guarantee. You can stop your Liberty return guarantee at any time.
- The costs for the return guarantee are:
- a once-off initial fee of 1% (for every five year guarantee period).
- the sharing of growth if your total aggregate return exceeds a specified target return (currently 20% of any excess above the target return of 14% p.a.). In other words you pay 0.2% for every 1% above the Target Return at the end of each year. If you stop your guarantee before the end of the five year guarantee period a year-to-date deduction for growth sharing will deducted.
- Trackers are offered at considerable value due to their low fees.
- Platform fees decrease based on the total assets under management of your investment .
- Advice fees are negotiable.
Annual Income drawn down
As with all living annuities you can set your income withdrawal rate annually between the limits set by regulation (2.5% to 17.5%). Liberty’s Bold Living Annuity allows you make investment choices you may have previously been too conservative to select. Having the extra return potential this brings will assist in boosting your sustainable income withdrawals in the future.
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