RETIREMENT planning experts estimate that one needs to achieve a minimum of 60% income replacement as a retirement pension in order to have decent retirement.
This can only be achieved after contributing to a pension fund for a minimum period of 40 years at a minimum contribution level of 15% of one’s gross salary, with or without the help of the employer.
After the devastating effects of inflation most members are stuck with the reality that their projected or expected pensions (at 60 or 65 whatever the retirement age is) will not amount to anything more than 15% to 20% income replacement depending on how close one is to retirement.
For those within five years of retirement this is closer to five to 10% income replacement. This is totally inadequate and can only lead to a life of certain poverty and deprivation.
The Fidelity augmented retirement plan is targeted at any person above the 45 and allows you to choose the level of pension you hope to retire on in the future.
The retirement pension is set at a minimum of US$250 per month payable for the rest of your life on the attainment of at least age 60 years, with various options to cater for your spouse. Minimum retirement age is 55 years, with the retirement set at 70.
Depending on the level of pension you intend to retire on we have come up with monthly rates of contribution which guarantee the pension you want to get at retirement. Naturally you choose the monthly rate of contribution which you are most comfortable with and can afford, but which will give you a guaranteed pension at the end of the period.
For example if you choose to retire on a monthly pension of US$500 per month at the attainment of age 65, you will be required to pay only US$129,66 per month if you are aged 45; US$257,91 per month to get a pension of US$1 000 per month; and US$1 283,89 to get a pension of US$5 000 per month.
Product is especially targeted at active workers in the late working life from 45 years to 65 years. All formally employed workers with a steady flow of income can purchase this product.
Flexible retirement options
The guaranteed maturity value plus vested bonuses will be transferred to a registered annuity fund to purchase regular or life annuities.
Members have the option to choose their own suitable retirement age ranging from 55 to 69 last birthday. Retirement before the age of 55 is only allowed on ill-health grounds subject to approval of the registrar of pensions.
The plan can be made paid up according to the Pensions and Provident Fund regulations and the paid up value will remain in the fund until the attainment of age 55 or earlier on death preceding retirement. Funds can then be used to purchase an annuity.
The accumulated value of the fund plus performance profits will be made payable to the client’s beneficiaries. The death benefit can be paid as a lump sum or annuity to the beneficiary.
You will be guaranteed a fixed income on retirement that is payable for a minimum 5 year term and thereafter guaranteed for life.
The guaranteed pension income is set at a minimum of US$250 per month and can be increased based on what the member wishes to achieve, and subject to the level of contribution selected by the member.