The latest Today’s Trustee magazine features an article that highlights 10X’s fresh approach to managing retirement funds: Upsetting the applecart. The article focuses on 10X’s view that the retirement fund industry has lost sight of its core purpose, which is to give members (investors) the best possible chance of meeting their retirement goal. Instead, the industry is [...]
March 6th, 2013 by 10X InvestmentsNo Comments
All retirement investors have the same objective: to secure a pension that will preserve their standard of living through-out retirement. Yet the retirement fund industry has obscured this essential objective, and contrived to make form and innovation the focal point. Yet what investors (and trustees looking after their fund) really need is an objective framework that enables them to make informed decisions. And the tools to identify the optimal solution from the myriad of options peddled by the industry.
Introduction National Treasury’s retirement’s road map revealed an unexpected turn with the release of Technical Discussion Paper B “Enabling a better income in retirement” in September 2012. The paper paints a grim picture of unscrupulous brokers who lure their clients into treacherous post-retirement products where they are subjected to complex choices, high fees and – [...]
Is it time for investors to stand on their own two feet? The Winter 2012 edition of Collective Insights, included in the 2 August 2012 edition of Finweek, posed this question. It is a relevant question – after all, most investors do not receive the performance they pay for: a global study by Lipper concluded [...]
We consider the best options with regard to retirement investing in South Africa for those approaching 50. Firstly, retirement saving is a (working) lifetime pursuit. Life expectancies are increasing, which means we all require more money to fund our years in retirement. This is a global phenomenon. You therefore need to keep saving by contributing to a retirement fund until you stop working.
The bulk of retirement investors are disengaged from the savings process. Their apathy and ignorance is shamelessly exploited by the industry’s marketing and distribution machine, which creates illusions of future wealth and suggests the possible rather than the probable. To this end, the industry perpetuates six investment myths that serve the interests of the industry but not the investor. Most realise far too late they have been duped, with severe consequences to their pension. The sooner they become aware of these myths – and the positive alternatives available in the market – the better.
The shift to defined contributions retirement funds has served employers and providers, but not investors. But expecting the financially illiterate to secure their own pension was a bad idea from the start, founded on hope and expediency rather than rational belief. That foundation has long since collapsed under the weight of instant gratification, procrastination, ignorance, deception and greed. The past damage cannot be undone, but the system can be fixed, to give young savers a fair shot at a decent retirement.
October 11th, 2011 by 10X InvestmentsNo Comments
Save 15% for 40 years to secure your retirement success, or so the standard industry mantra. It works well as a sound bite, but how well does it work in real life? Based on investment returns over the past 110 years, not so well. Other factors come into play, and unless these align favorably, the probability of achieving a ‘decent’ retirement is unacceptably low. Couples, in particular, can expect a high probability of success only once the contribution rate increases to 20% or the investment term lengthens to 45 years. Both possibilities seem remote, throwing into question are our accepted expectation of a predetermined retirement date.
The threat of a “termination penalty” compels many investors to stick with their current RA. But the term is a deliberate industry misnomer, to discourage investors from switching or making their RA paid-up. In truth, this penalty is no more than an accelerated recovery of upfront costs, and should therefore not be a factor in deciding whether to transfer your RA or not.
In the excitement of staring a new job, you may lose sight of the impact this may have on your current pension arrangements. You may be forced to terminate your existing arrangements, or transfer to another fund, and you potentially face the loss of tax breaks and even a large chunk of your accumulated RA savings. In this article we spell out the consequences and your options.