There is a great deal of misunderstanding surrounding the rather complex world of life and living annuities. Indeed, these products are often confusing and difficult to navigate for the lay person.
Below is a Q&A that seeks to simplify these products and promote a better understanding of their benefits and potential drawbacks…
In the not too distant past, retirement was a very straightforward process for most working people.
The average middle class working professional would spend a substantial number of years (if not their entire working life) working for the same company. When a certain, specified age was reached the employee was then waved off with a pension package that would be sufficient to allow him or her to maintain a decent standard of living as an official retiree.
All very reassuring, right?
Following on from the “8 Curiously Common Mistakes That Investors Make” article and how it is often human nature to expect investment returns to only go up after a period of good returns, it is worth noting that a generally held view amongst asset managers is that we are going into a lower-return, higher inflation world. The point is it would be prudent to lower our expectations going forward.
Over the years I have found that there is a large psychological/ behavioural aspect to investing and the Blog will focus on this. However, this will not be to the exclusion of other relevant information and financial planning issues. And so that we do not get too serious, there will also be regular postings by a columnist and cartoonist to provide some financial (and non-financial) humour. We will focus on a certain topic every month, but will also comment on any current and relevant “in the news” stories as they happen – in South Africa as well as around the world.
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