Many South Africans think that securing their retirement income is an overwhelming endeavor. It often seems like you need complex spreadsheets, detailed calculations, and expensive financial advisors.
The truth is that achieving the retirement income you want from your living annuity relies on mastering two essential principles: reducing your fees and optimizing your asset allocation. Once you have these basics down, you’ll be in a much better position to enjoy the retirement you deserve.
Are your investments working as hard as they should? You can receive a free comparison report from 10X Investments.
Fees, the hidden foe of your retirement
Here’s a startling fact: a mere 0.5% difference in fees can result in 20% less income during retirement (you can double-check our calculations here).
This is true even during your accumulation phase. When you start taking withdrawals from your investments, the impact is even more pronounced. According to the 10X Retirement Reality Report, an astonishing 50% of retirees aren’t aware of the costs they’re incurring or mistakenly think there are no fees at all.
Let’s clarify this with some solid numbers.
The 10X Living Annuity charges just 0.87% per year, less than one-third of the typical fee you might encounter. For amounts exceeding R5 million, the fees decrease even more.
Impact on a R3 million living annuity:
- Typical fees around 3% = approximately R87,000 annually (R7,250 monthly)
- 10X fees = R26,100 annually (R2,175 monthly)
- Your savings: R60,900 annually (R5,075 monthly)
This isn’t just about saving money; it’s about potentially extending the lifespan of your retirement capital.
The annual savings of R60,900, compounded over a 20-year retirement, could prolong your income sustainability by five to ten years.
You can get straightforward information about your retirement investments from a 10X retirement expert at no cost. Just reach out.
Asset allocation: The driving force behind your returns
Long-term research by Brinson, Singer, Beebower, and Hood indicates that asset allocation (investing in suitable asset classes, like equities or bonds) is responsible for the majority of your investment returns.
This may surprise you, as mainstream media often emphasizes stock picking and market timing. However, decades of research show that how you allocate your money between growth assets (like shares and real estate) and defensive assets (like bonds and cash) significantly influences your investment success.
Did you know the 10X Your Future Fund is designed to provide affordable access to a wide variety of local and international asset classes?
For most working South Africans, it’s wise to consider a gradual risk-reduction strategy: allocate the bulk of your funds into growth assets while you’re young, and gradually shift to more defensive assets as retirement approaches. However, don’t eliminate growth entirely — your retirement may last two to three decades, so you’ll need to remain a long-term investor with exposure to growth assets.
Check out this article on 10X’s retirement investment strategy to learn more.
The ‘Golden Equation’ for retirement success
Investment returns ≥ inflation rate + fees + income drawdown
This simple framework, which we call the ‘Golden Equation,’ tells you what to consider for a sustainable retirement. If you can maintain this balance by keeping fees low, choosing growth-focused investments, and drawing a reasonable income during retirement, it becomes much more likely that your funds won’t run out after retiring.
A living annuity that supports not just your life but also your prosperity
After years of saving for retirement, the last thing you want is an investment product that silently erodes your wealth due to unnecessary fees and poor investment choices.
Unfortunately, that’s precisely what many South African retirees encounter when selecting the wrong living annuity provider.
Think about standard fees approaching 3% annually, a plethora of fund options that confuse more than they clarify, and a general lack of understanding among retirees regarding sustainable withdrawal strategies. For a retiree with R3 million, this translates to approximately R87,000 annually in fees — funds that could have supported a longer retirement income.
You can acquire clear and concise information regarding your retirement investments from a 10X retirement expert at no charge. Just get in touch.
Elegant simplicity? Yes, and it works
The 10X Living Annuity adopts a radically different approach, aimed at minimizing risks to sustainable retirement income.
Keep fees low and retain more of what you’ve earned
Every percentage point you pay in fees means less money in your pocket, less capital to grow your investment, and less wealth to leave for your heirs.
Get your effective annual cost (EAC) from your living annuity provider today, compare it to others, and… Stop. Paying. High. Fees.
Understand your fees! Make use of the 10X Effective Annual Cost calculator.
By adhering to three core principles, 10X strives to deliver what retirees truly need: consistent, inflation-beating returns.
- Strategic asset allocation based on long-term findings rather than short-term predictions;
- Cost-effective implementation through broad diversification instead of concentrated investments;
- Disciplined rebalancing based on valuation principles, not market trends.
Switching is easier than you think
Many retirees remain tied to suboptimal living annuities, mistakenly believing that switching is complicated. It’s not.
Moving to 10X involves:
- No disruption of monthly income payments;
- All administrative tasks handled by 10X transfer specialists; and
- Immediate benefits from lower fees.
The process usually takes four to six weeks, so contact the 10X Investment consultants today to learn more about the 10X Living Annuity or to obtain a comparison of your current retirement investments.
This information is for general informational purposes only and does not constitute financial advice. 10X Investments is an authorized FSP (number 28250). The 10X Living Annuity is underwritten by Guardrisk Life Limited.
If you found the video informative, access more industry-leading insights and actionable, retirement-focused content on the Rands&Sense by 10X Hub.
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