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Retiring in the time of COVID

28 Sep 2020

​Having to retire in the face of a market downturn in which your hard-earned life savings may appear to be worth somewhat less can be one of the most daunting challenges anyone can face.

The fact is, markets go up and down all the time, mostly in the long-term they go up, but having a depressed market can make you question the real value of your investments.

The current COVID pandemic may seem troubling, but if you've been around long enough to retire, you'll remember September 11, and the markets crisis of the late 1990's for example. You'll also know that markets recover in the end. But you would be wise to ask yourself what you can do to buffer yourself against these kinds of swings.

Liberty's Living Annuity is designed to do this. It gives you the flexibility to choose from 190 Funds managed by some of the country's top asset managers.

With such a wide range, including offshore funds and trackers, you can switch your funds or invest in a combination of any of these Funds at any time without losing or affecting your Liberty return guarantee

The Liberty Living Annuity comes with an optional High-Water Mark Guarantee feature which protects your funds against any potential market crashes. Choosing to add the Guarantee means that each of your investment's units is protected from falling by no more than 20% of the highest value reached at the end of every three months. 

"A High-Water Mark Guarantee is the highest value your investment is expected to reach and, by purchasing this option, you are guaranteed to receive at least 80% of that value. So even if the markets go down, your investment is protected, thus creating a safety net during market downturns," explains Nosipho Nhleko, Investment Product Specialist at Liberty.

Another optional feature of the Liberty Living Annuity plan is its Income Enhancer Benefit. This is designed to provide an additional layer of security against the client running out of money.

"This bonus comes from those clients who have selected this benefit and who have passed on in that particular bonus year. The bonus distribution is done equitably, considering the client's age and gender, amongst other factors," says Nhleko.

She adds further that having a reasonably low drawdown rate is important in ensuring you do not start eating into your capital base.

It should be said that by using the recommended drawdown rates and consulting with your Financial Adviser, you can work out a drawdown rate which covers your living expenses and best secures your investment portfolio.

The Liberty Living Annuity is just another way Liberty is in it with you, helping you make the right choices in tough times, and getting the most out of the good times for your future to be a stable one.

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Liberty Group Limited (Reg. no 1957/002788/06) is a licensed Insurer and an Authorised Financial Services Provider (no 2409).