Re­tire­ment prod­ucts are not bad

Finweek English Edition - - MONEY - Costs breaks re­tire­ment ve­hi­cles are tax- free. you can achieve a higher re­turn for the same level of risk.

There has been much de­bate about the of re­tire­ment prod­ucts re­cently. Al­though this de­bate i s nec­es­sary, the per­cep­tion it is cre­at­ing is that re­tire­ment prod­ucts as a whole are bad.

The re­al­ity is, most South Africans are un­likely to re­tire well with­out sav­ing through a re­tire­ment prod­uct! I t is al­most im­pos­si­ble to save enough for re­tire­ment with­out us­ing the tax that re­tire­ment prod­ucts of­fer.

Re­search shows that you have to save around 15%-17% of your gross salary through­out your ca­reer to re­tire well. Re­tire­ment prod­ucts al­ready al­low you to save this be­fore pay­ing tax. If you do not t ake ad­van­tage of t ax breaks, you will have to save sig­nif­i­cantly more (de­pend­ing on your tax rate). In ad­di­tion,

This means that

In ad­di­tion, our re­tire­ment sav­ings in­dus­try is highly de­vel­oped and well reg­u­lated. It is among the best in the world and of­fers a va­ri­ety of so­phis­ti­cated prod­ucts to choose from.

I have ad­vised pri­vate clients for al­most twenty years – those with re­tire­ment prod­ucts have al­most al­ways saved more. Why? Be­cause it is hard to ‘get out’ of th­ese prod­ucts. They force in­vestors to save in a dis­ci­plined man­ner over a long time. Rather save us­ing a some­what ex­pen­sive prod­uct (the costs are al­ready de­clin­ing) than not save at all.

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