BOITUMELO NTSOKO: Retirement planning can be a daunting task, but the key is a well-structured plan. In this episode, we discuss different strategies for generating income in retirement – including annuities, dividend stocks and working in retirement. Joining us to share valuable insights on these strategies is Suzean Haumann, who is a certified financial planner at Brenthurst Wealth. Welcome, Suzean.
BOITUMELO NTSOKO: Annuities can provide a guaranteed income stream in retirement, but there are many different types of annuities available. Can you maybe explain the different types and the pros and cons? A guaranteed annuity has the pro that you are guaranteed an income for the remainder of your life and if you have a second life assured, which may be your spouse, you then know that they will also be covered with an income until they pass away.
That guaranteed income is paid back into the living annuity part. And then from there, you can draw your income. So what we see in many instances is that [from] the guaranteed part you almost cover the necessities of the investors, the monthly need to pay the rental or the medical aid, and food. BOITUMELO NTSOKO: What should people consider when weighing which annuity is best for their circumstances?
BOITUMELO NTSOKO: Dividend stocks are another option for generating income in retirement. What are some of the factors investors should consider? BOITUMELO NTSOKO: Working in retirement can be a viable option for generating income, especially when you have insufficient funds. What are some of the things retirees need to take into account when looking at this option?
It’s not a favourable [option] if you need to pay R1 000 a week on petrol, but your income is only R5 000 at the end of the month. Then most of your money goes to petrol getting to your work, and [you are] not getting an income. So those factors need to be considered. Having the option to make use of that Airbnb over the December holidays is a very good income stream, if you can do that.