DISCOVERY RETIREMENT INCOME PLAN

Transcription

1 DISCOVERY RETIREMENT INCOME PLAN

2 CONTENTS RETIREMENT INCOME PLAN

3 WHAT IS A RETIREMENT INCOME PLAN? Our Retirement Income Plans are designed to give you a regular income throughout your retirement (known as annuity income or a pension). The amount you receive depends on the type of plan you choose (a Living Annuity or a Fixed Annuity) and your applicable tax rate. The Living Annuity allows you to manage your retirement savings the way that you want to, while the Fixed Annuity gives you peace of mind from knowing what your income will be in retirement. Features of a Living Annuity You can withdraw an income of between 2.5% 17.5% a year. You need to manage your investment so that it lasts throughout your retirement. All investment growth on the investment funds you choose is tax-free under current tax practice but your income will be taxed. You can leave your remaining investment value to your beneficiaries when you die. FIXED ANNUITY for more information. Read the Retirement Income Plan Fact File relevant to your investment

4 AT A GLANCE LIVING ANNUITY INVESTMENT TERM With the Living Annuity, you choose the income you want to receive. And you get rewarded for being proactive about managing your money and your health in retirement. You can receive boosts to your retirement income of up 50% with these rewards. Short term Medium term Long term MINIMUM INVESTMENT AMOUNT R INVESTMENT GUARANTEES No guarantee of performance TAX Income payments (annuities) are taxed as gross income FEES Discovery fees Financial adviser fees Investment manager fees READ THE RELEVANT FACT FILES FOR DETAILS OF: How you can get boosts to your income How the fees work What happens to your investment on your death Read the Retirement Income Plan Fact File relevant to your investment

5 HOW TO INVEST IN A LIVING ANNUITY When you are 55 or older and decide to retire, you can withdraw up to a third of your retirement savings as a cash lump sum that you can use as you wish. You can then invest the rest in a living annuity. You need at least R to invest in our living annuity. The different sources of money that you can use to invest in a living annuity are: Pension funds Provident funds Preservation funds Retirement annuities Transfers from other living annuities. Read the Retirement Income Plan Fact File relevant to your investment

6 WHY THE DISCOVERY RETIREMENT INCOME PLAN? UNIQUE BENEFITS OVERVIEW Get rewarded with boosts to your income of up to 50% for life for withdrawing wisely and managing your health. Withdraw wisely Withdraw responsibly from your retirement savings. Live well By managing your health. Do your health checks, stay active, eat well, look after your weight, and meet your chronic adherence goals. Up to 50% extra income Different boost percentages apply. These percentages depend on your withdrawal rate, your Vitality status and Vitality health goals and the proportion of your investment in qualifying funds. Read the Retirement Income Plan Fact File relevant to your investment

7 LIVE WELL AND WITHDRAW WISELY With our Living Annuity, you can get boosts added to your income for living well and withdrawing wisely. Your behaviour What you get Meet the following goals from the Active Rewards programme: Achieve at least two activity goals every month You get a boost of up to 50% to your retirement income. Maintain your overall Vitality status Live well Complete your personalized health checks before your receive your income payment Meet your monthly HealthyFood targets Meet your weekly and monthly medicine adherence goals Meet your weekly and monthly weight management goals Withdraw wisely Withdraw responsibly from your retirement savings EXTRA BENEFITS FROM OUR LIVING ANNUITY We increase your investment value if you die before age 70. We do this through a benefit called the LifeBooster. Your behaviour Live healthily and manage your Vitality status What you get You receive an increase to your investment value of up to 15% if you die before age 70. The size of the increase depends on your Vitality status. Read the Retirement Income Plan Fact File relevant to your investment

8 A WIDE CHOICE OF FUNDS TO INVEST IN THERE ARE ALMOST 200 FUNDS TO CHOOSE FROM YOUR PLAN IS A COLLECTION OF FUNDS You, together with your financial adviser, decide which funds to invest your money into. Your decision should align with the investment goals you have. We offer you access to a range of unit trust funds across various providers through a single entry point. This means you can invest in our investment plans and choose investment funds that are managed by leading investment managers. Discovery funds (with the exception of the Discovery Money Market Fund) may qualify for the income boosts. The list of qualifying funds may be updated from time to time and can be seen on individual fund fact sheets available at You can invest in Discovery funds where our investment managers pick the right blend of asset classes (shares, bonds, cash, property and so on) to reach your investment goals. We also have our unique range of Escalator Funds which guarantee at least 80% of the highest value the fund has ever reached. You can invest in funds managed by top external investment managers. We offer both local and offshore investment opportunities. Read the Retirement Income Plan Fact File relevant to your investment

9 FEES FOR YOUR INVESTMENT THERE ARE CERTAIN FEES THAT APPLY TO OUR RETIREMENT INCOME PLANS FEES TO DISCOVERY INVEST FEES TO THE INVESTMENT MANAGER FEES TO YOUR FINANCIAL ADVISER There are no initial fees to Discovery Invest. There is a yearly admin fee based on the size of your investment. Investment managers may charge initial and ongoing fees. You can find these fees on the relevant fund fact sheets available at Your financial adviser may charge initial and ongoing fees for giving financial advice. Refer to the Fact File for more information about all fees. Read the Retirement Income Plan Fact File relevant to your investment

10 READ THE RELEVANT FACT FILE AND SPEAK TO YOUR FINANCIAL ADVISER The details of the features we offer are set out in the relevant Fact File at Speak to your financial adviser to help you make informed decisions about your investments. If you don t have a financial adviser, you can contact our call centre on Discovery Invest This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply. GM_55734DI_20/11/2018_V13

11 LINKED PAGES GUIDELINES ON MANAGING YOUR LIVING ANNUITY You are responsible for making sure your retirement savings last for as long as you live To make sure that your retirement savings last long enough, it is important that you make responsible withdrawals. According to law, you can choose to withdraw between 2.5% and 17.5% per year. You can choose the frequency at which you receive your income You can choose to receive your income monthly, quarterly, twice a year or yearly. If you would like to change the frequency you chose, you can do this once a year on your retirement anniversary. You can change your withdrawal percentage once a year on your investment anniversary. Remember that you receive a boost to your retirement income of up to 50% for whole of life, when you withdraw wisely and live healthily in retirement. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

12 ADVISER THINGS TO DISCUSS WITH YOUR FINANCIAL ADVISER ADVANTAGES OF USING A FINANCIAL ADVISER Longevity We re living longer and that has changed traditional retirement practice. A potentially longer retirement timeline means that you need to save more money and that you need to invest your money differently in the years leading up to retirement. The unpredictable nature of markets Markets are unpredictable. They can go up one day and down the next. These market changes are risks to your investment because if you have to withdraw your money while there is a market downturn, you might lose money on your investment. When you have a longer investment horizon you can afford more risk, but as retirement approaches you need to consider moving money to lower-risk investments. The impact of inflation Inflation is the rise in the cost of living. This means you will pay more for the same goods and services tomorrow than you do today. When you are investing for your future, it s important that the money you invest grows at the same or higher rate than inflation. Compound interest Because of compound interest, the more time you have available to invest, the greater your benefits will be in retirement. Diversifying It s important to spread your investments among different asset classes, such as equities (shares), bonds, property and cash. This will ensure that your risk is spread so if one asset class performs poorly, the value of your other investments can make up for this. How much risk you can afford to take Your investment strategy starts with understanding your attitude to risk. Generally, the higher the potential risk of an investment, the higher the potential return. Different asset classes like cash, bonds, property and equities have different levels of expected risk and return; cash has low levels of expected risk and return, while equity has high levels of expected risk and return. Knowledgeable about managing money Financial advisers are qualified in financial planning and can help you decide on and keep track of your investment goals, savings strategies and retirement options. High standards of competence To give expert financial advice, financial advisers need to meet certain standards of competence, including professional qualifications, passing regulatory examinations and undergoing training. Licensed to sell certain products We only allow financial advisers who are registered with the Financial Sector Conduct Authority (FSCA) to sell you specific financial products. They are required to have extensive knowledge of the product they are recommending to you, and they must be competent (professional and skilled) in the financial advice they provide. Objective advice Our code of conduct for financial advisers is strict: our advisers must be able to give clients objective advice about the products they buy so that they can make informed decisions. It s essential that clients best interests are at the heart of everything our advisers do so they must avoid or disclose any conflicts of interests. At the core of everything is treating clients fairly. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

13 THE TAX FOR INVESTING IN A LIVING ANNUITY All investment growth on the investment funds within the wrapper that you choose in the Living Annuity is tax-free under current tax practice. Your income payments from the Living Annuity and any boosts you receive from us are taxed according to the latest SARS income tax tables, or any tax directive you may have for a different rate. Tax that applies on your death On your death, lump-sum payments to beneficiaries are taxed according to the lump-sum retirement tax tables published by SARS. If your beneficiaries choose to receive the money as a regular income, the income will be taxed at the beneficiary s marginal rate of tax. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

14 WHAT HAPPENS TO YOUR INVESTMENT WHEN YOU DIE When you die, your remaining investment value is distributed to your beneficiaries on your death. Appointing beneficiaries and benefits payable on your death You may appoint or remove beneficiaries at any time. On your death, we will pay your investment value less any fees and taxes to your beneficiaries. They may choose to receive the money as regular income, as a cash lump sum, or as a combination of an annuity or cash lump sum. If you haven t appointed any beneficiaries, we will pay the investment value less any fees and taxes to your deceased estate. Through the LifeBooster, we will increase the value of your investment at the time of your death by up to 15% if you live healthily and manage your Vitality status. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

15 WHAT HAPPENS TO YOUR INVESTMENT WHEN YOU DIE When you die, your remaining investment value is distributed to your beneficiaries on your death. Appointing beneficiaries and benefits payable on your death You may appoint or remove beneficiaries at any time. On your death, we will pay your investment value less any fees and taxes to your beneficiaries. They may choose to receive the money as regular income, as a cash lump sum, or as a combination of an annuity or cash lump sum. If you haven t appointed any beneficiaries, we will pay the investment value less any fees and taxes to your deceased estate. Through the LifeBooster, we will increase the value of your investment at the time of your death by up to 15% if you live healthily and manage your Vitality status. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.

16 FIXED ANNUITY A Fixed Annuity gives you peace of mind from knowing what your income will be in retirement and you ll receive an income for the rest of your life. Our Fixed Annuity is purchased with the full or two-thirds benefit that you receive from your pension fund, provident fund or retirement annuity when you retire. Minimum investment amount R Investment guarantees Guarantee of income Tax Income payments (annuities) are taxed as gross income Fees Your lump sum contribution will be reduced by any financial adviser initial fees plus VAT if applicable. The balance will be used to buy your annuity income. No additional charges will be levied. Read the relevant Fact Files for details of: Choosing a guarantee term What happens to your investment on your death How the fees work The guaranteed term You can choose to have a guarantee term, which ensures that if you die within the first few years of the annuity, your dependants or estate will continue to receive the income. For both the single-life and joint-life annuity the guarantee terms available range from 5 years to 20 years. You can choose a single-life or joint-life annuity Single-life: You will receive a regular income until you die, or your guaranteed term ends, whichever is later. Joint-life: A regular income is paid for as long as you or your spouse are alive or until the end of the guarantee term, whichever is later. You can also choose for the surviving spouse to receive a lower income for life after the first spouse dies. You can choose to have your income increased At the start of the investment you can choose the rate you want your income to increase by on each anniversary of the fixed annuity. You can choose a fixed rate (between 0% and 15%) or at a CPI-related rate. You can also choose how often you would like to receive your income (referred to as the frequency) this can be monthly, quarterly, half-yearly or yearly. What happens when you die The fixed annuity policy ends on your death with no remaining amount to be distributed to beneficiaries. If you die before the end of a guarantee term, we ll keep paying the income payments to your beneficiaries until the end of that term if you have selected the joint-life option we will keep paying the income payments to your spouse for the rest of their life. This brochure is meant for information purposes only and should not be taken as financial advice. For tailored financial advice, please contact your financial adviser. Discovery Life Investment Services (Pty) Ltd: Registration number 2007/005969/07, branded as Discovery Invest, is an authorised financial services provider. All life assurance products are underwritten by Discovery Life Ltd. Registration number: 1966/003901/06. An authorised financial service provider and registered credit provider, NCA Reg No. NCRCP3555. Product rules, terms and conditions apply.