Financial guidance for retirees

• Choose program withdrawal at retirement

  Programmed Withdrawal is a product offered by the Pension Fund Administrators for periodic payments (monthly/quarterly) to a retiree. It is a structured periodic payment based on the peculiarities of the retiree, the Retirement Savings Account balance is spread over the expected life span of the retiree while the funds remain in the custody and are managed by the Pension Fund Administrator. The benefits of programmed withdrawal over annuity include:

  • Programmed Withdrawal serves as social security for retirees while annuity does not qualify as social security.
  • Retirement benefits is in individual RSA account while Retirement benefits under annuity is in a pool of fund.
  • Retiree monthly pension is reviewed for enhancement from time to time under programmed withdrawal by the National Pension Commission, under annuity there is usually no incremental review of payment assured for life.
  • The investment income earned per contributor is credited into the RSA balance of the retiree while the profit on annuity fund belongs to the insurance company.
  • Annuity is guaranteed for only 10 years. If the Retiree dies after the guarantee period, beneficiaries are not entitled to the deceased balance in the Annuity pool. However, Programmed Withdrawal benefits the retirees as well as the next of kin, because the outstanding account The historical volatility and downside risk of each investment balance will be paid to the beneficiary upon retiree’s death

• Create a realistic budget

  Most retirees will be on a fixed income, so it is important that an expense budget is created based on fixed income.

• Evaluate your healthcare

  Your choice of the right health management plan is extremely important. Consider discussing your options with an expert who can help navigate through these issues to make the appropriate choice. Routine medical check-ups with health provider is also vital.

• Pay off debt

  If possible, pay off all debts and do not create new ones. Bearing in mind that most people will be on a fixed income monthly