By: Mashudu Lavhengwa
Just like children are the seeds of our future, consider retirement planning in your youth as planting the financial seeds for your golden years. Your youthful years are like the gardening season for your retirement, and a retirement annuity is your versatile tool kit.
A retirement annuity serves different purposes depending on your needs at that point in time. Individuals who are already contributing towards a pension, and/or provident fund can save into a retirement annuity if they believe their current provisions for retirement are insufficient and they would like to contribute more. This could be considered as a just-in-case retirement insurance plan.
For individuals who do not contribute to a pension/provident plan, a retirement annuity could be considered a necessary insurance for the golden years.
Unlike a pension or provident plan, you don’t need to be employed to take out a retirement annuity.
This means that people who work in industries where they do not contribute towards a pension/provident plan (such as freelancers, gardeners, entrepreneurs, domestic workers, taxi drivers, actors, and actresses, etc.) are eligible for a retirement annuity if they can make a monthly contribution.
At first glance, one might assume or expect that investing in a retirement annuity requires a substantial amount of money, but that is not the case.
*Mashudu Lavhengwa is a junior economist at Metropolitan.