You can also listen to this podcast on iono.fm here.
In this episode of the Money Rules Podcast, I’m joined by Marius Fenwick, a certified financial planner at WealthUp, to discuss the complexities of ensuring a sustainable income from living annuities.
We explore how market volatility, inflation, and offshore exposure impact the drawdown rates from living annuities, with Fenwick highlighting the global standard of a 4% drawdown rate and its relevance in South Africa. He also discusses key risks like capital depletion, investing too conservatively, and the importance of inflation-beating returns.
Fenwick also shares practical strategies for reducing these risks, including managing income escalation, structuring portfolios, creating an ‘income pot’, and the importance of long-term planning.
Read:
The two realities that destroy wealth during retirement
Living annuities: How to tackle the offshore investment conundrum
Listen to previous Money Rules podcasts here.
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This is a fantastic, most helpful Money Rules Podcast! Thank you, Marius and Boitumelo. I feel much more equipped to make the right decisions en route to retirement.
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My wife and I are retired (i.e. stopped earning salaries) 8 years ago and since we don’t enjoy pensions our retirement is self funded, principally from fixed deposits which are fed from our equity.
I do have two small RAs with a total value of R600k – I regret not contributing more to RAs in the past. I set the draw-down to 4% about 5 years ago and while it only pays out ca. R1700,00 pm both funds continue growing!. So set your draw-down to ca. 4% if you can, it’s a good target.
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