Financial Planning

Guaranteed Annuity Portfolio provides clients with the best of both worlds

Fareeya Adam, Head of Product Solutions for Momentum Retail Investments

Why choose the benefits of your retirement product, or why get two products to fulfill all your needs if you can get one that covers it all. The new Guaranteed Annuity Portfolio component from Momentum Investments that was launched this week allows clients to have the benefits of both a life annuity and living annuity in one product.

Outlining the need for this offering, Fareeya Adam, Head of Product Solutions for Momentum Retail Investments, indicated that a life annuity and living annuity both have their benefits but also shortcomings.

“A life annuity pays a retired client a regular guaranteed income for life. This makes it great to cover the client’s life expenses during retirement, such as medical costs, groceries, and any other monthly costs. However, it restricts the client as one does not have the  flexibility to use the funds for more flexible expenses like a holiday or capital injection to start a business while one is on retirement” explains Adam.

“The living annuity allows clients to select what income level they would like to earn from their investment. This must be between 2.5% and 17.5% of the value of the investment. It can be adjusted to the client’s needs annually. But clients may run the risk of depleting their investment funds if life and living expenses are not managed correctly.

This is why the living annuity product (the Retirement Income Option) has been enhanced to include a Guaranteed Annuity Portfolio as it provides clients with a combination of the benefits that come from the life annuity and living annuity. Your retirement savings can continue to grow while you receive a regular guaranteed income” concludes Adam.

Clients can structure their retirement income product to provide protection against investment, inflation and longevity risks, and while at the same time getting exposure to growth assets. Advisers can assist new and existing clients in Momentum’s living annuity to balance this in the way that best suits their individual needs. This provides optimal flexibility and balancing of protection and risk. 

In closing, Fareeya indicated that achieving a successful retirement was personal and depended on individual circumstances. For most people, it means receiving an income that increases with inflation and lasts for as long as they live. The major benefit of this offering is that it provides a client with both protection and growth options in one streamlined solution.

Momentum Investments has launched its new retirement offering at its annual Wealth Matters event that took place at Sandton on Wednesday, 11 May 2022. This event is a platform to share key insights that are shaping the investment landscape and unpack topical issues such as the remaining top of mind in a world filled with uncertainties, understanding how offshore investing is key to futureproofing clients’ investments and the impact of technology in creating client-centric solutions.







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