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    Thandi's: Life Stage

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    Zandile Angeline Dhlomonsele
    Thandi is introduced as a case study to help members understand how the fund's goals-based lifecycle strategy works in practice. She is currently 25 years old and starting her career. As she is in the growth phase of her savings journey, she can invest more aggressively since retirement is still far off. When she turns 60, she will need to start planning in earnest for retirement in 5 years. She will select one of three pre-retirement portfolio options based on her goals - one that guarantees income for life, one that targets inflation-linked income, or one that allows flexible withdrawals. The document provides scenarios showing how each portfolio could meet Thandi's needs based on factors like health, family considerations, and risk tolerance

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    Thandi's: Life Stage

    Uploaded by

    Zandile Angeline Dhlomonsele
    6 views1 page
    Thandi is introduced as a case study to help members understand how the fund's goals-based lifecycle strategy works in practice. She is currently 25 years old and starting her career. As she is in the growth phase of her savings journey, she can invest more aggressively since retirement is still far off. When she turns 60, she will need to start planning in earnest for retirement in 5 years. She will select one of three pre-retirement portfolio options based on her goals - one that guarantees income for life, one that targets inflation-linked income, or one that allows flexible withdrawals. The document provides scenarios showing how each portfolio could meet Thandi's needs based on factors like health, family considerations, and risk tolerance

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    Thandi is introduced as a case study to help members understand how the fund's goals-based lifecycle strategy works in practice. She is currently 25 years old and starting her career. As she is in the growth phase of her savings journey, she can invest more aggressively since retirement is still far off. When she turns 60, she will need to start planning in earnest for retirement in 5 years. She will select one of three pre-retirement portfolio options based on her goals - one that guarantees income for life, one that targets inflation-linked income, or one that allows flexible withdrawals. The document provides scenarios showing how each portfolio could meet Thandi's needs based on factors like health, family considerations, and risk tolerance

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    6 views1 page

    Thandi's: Life Stage

    Uploaded by

    Zandile Angeline Dhlomonsele
    Thandi is introduced as a case study to help members understand how the fund's goals-based lifecycle strategy works in practice. She is currently 25 years old and starting her career. As she is in the growth phase of her savings journey, she can invest more aggressively since retirement is still far off. When she turns 60, she will need to start planning in earnest for retirement in 5 years. She will select one of three pre-retirement portfolio options based on her goals - one that guarantees income for life, one that targets inflation-linked income, or one that allows flexible withdrawals. The document provides scenarios showing how each portfolio could meet Thandi's needs based on factors like health, family considerations, and risk tolerance

    Copyright:

    © All Rights Reserved
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    Flag for inappropriate content
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    of 1

    Retirement

    Thandi’s
    By now you would have received
    communication explaining the enhancements
    the trustees are making to the fund’s

    life stage story goals-based lifestage strategy. To help you


    understand what the enhancements mean on
    a practical level, we would like to introduce
    you to our friend Thandi.

    Thandi is 25 years old and has recently


    qualified as an accountant. As you can
    Meet imagine, she was very excited to start her

    Thandi!
    very first job at Innovation Insights.
    Yay Thandi!

    Let’s follow Thandi on her


    goals-based lifestage
    journey.
    Innovation Insights
    has a normal
    retirement
    age of 65.

    25
    years old
    60 65
    years old years old

    Pre-retirement
    Growth phase – 35 years Retirement
    phase

    The
    growth phase
    Thandi is in the growth phase of her retirement savings journey and has a long
    way (35 years) to go before she has to start thinking about her retirement. This
    means that Thandi can afford to invest her retirement savings in riskier assets
    that are expected to grow her money faster in the long term.

    The
    pre-retirement phase

    At this point, Thandi has to consider Thandi is invested The pre-retirement Thandi has taken
    Thandi is her circumstances in the goals-based portfolio that the time to gather
    turning 60. She both financially and lifestage model Thandi chooses information about
    needs to start personally to develop and needs to select now will align each option and taken
    planning for her goals at retirement. one of three pre- with the type of into account her goals
    her retirement, By understanding retirement portfolios pension she buys at and circumstances.
    which is five and planning for her to go into. She must retirement. This will Where necessary,
    years away. retirement, Thandi choose a portfolio ensure that she has Thandi has also
    can have peace of according to her a smooth transition discussed the options
    mind when she is retirement goals. at retirement. with a professional
    approaching retirement. financial planner.

    Scenario 1 AF Houseview Income Target portfolio

    This default portfolio targets a with-profit annuity. It


    guarantees Thandi income for the rest of her life, no matter
    how long she lives or what happens in the investment markets.
    Her monthly income will not grow smaller. This gives Thandi
    certainty for the rest of her life.

    It means that if you don’t choose one


    Thandi is not sure which pre-retirement portfolio to choose. of the three pre-retirement portfolios,
    The trustees understand that there will be members who won’t the fund will automatically choose this
    make a choice. Thandi, like these members, will be defaulted option for you. Although this is the default
    into this portfolio. The default pre-retirement portfolio is portfolio if no choice is made, you can
    structured to suit the majority of members. also choose to invest in this portfolio.

    AF Inflation Income Target portfolio Scenario 2

    Thandi prides herself on living a very healthy lifestyle because she wants to live a
    long life. She would therefore like to make sure that she gets an income from her
    retirement savings for the rest of her life.

    Thandi has also made sure that her family has sufficient death cover, through a
    separate policy, if she passes away. Thandi decides that a guaranteed pension
    will best suit her retirement needs and selects the AF Inflation Income Target portfolio which will align her
    risk profile to that of an inflation-linked guaranteed annuity.

    Scenario 3 AF Flexible Income Target portfolio

    Thandi decides that she would like to like any remaining money from her
    choose the amount she gets from her retirement savings to be paid to her
    pension every month (her drawdown family if she passes away.
    rate).
    Thandi has been advised that there
    Thandi believes she is knowledgeable is a risk of outliving her money.
    about her finances and is worried Therefore, Thandi feels a flexible
    that she will not finish her money pension (living annuity) best suits
    before her death. She is also her circumstances and retirement
    concerned that her life cover will not needs and chooses the AF Flexible
    be enough for her family and would Income Target portfolio.

    Disclaimer:
    These scenarios are for illustrative purposes only. Every member is different and has individual circumstances. You need to speak to a licensed financial adviser
    to understand your options.

    alexforbes.com

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