Giving you more out of your retirement

Discovery Invest has created an innovative way to increase your retirement savings as well as your retirement income with the new Retirement Upfront Investment Integrator and the new Retirement Income Investment Integrator. Combining these new benefits with the Discovery Retirement Optimiser (DRO) allows you to achieve an ultimate retirement solution that maximises your retirement savings. The Retirement Upfront Investment Integrator gives you up to 15% extra on your retirement savings. The Retirement Income Investment Integrator, a world first investment structure, provides you with up to 50% extra on your retirement income for the first 10 years of your retirement. The Discovery Retirement Optimiser is a product unique to Discovery, which allows you to channel unused risk cover from your Discovery Life Plan (life insurance policy provided by Discovery Life) into added tax-free payments in retirement.

Retirement integration in action – what it means for you

Peter is age 35. He invests R500 000 into the Discovery Core Retirement Plan and elects to invest 100% in Discovery Funds. His selected retirement age is 65.

With a term to retirement greater than 25 years, he receives a Retirement Upfront Investment Integrator boost of 15% which is R75 000 (= 15% x R500 000) at the start of his investment.

He also invests R2 000 from his salary every month into the Discovery Retirement Optimiser, starting at age 35. Each year, his annual contributions to the Discovery Retirement Optimiser increase by 9%.

With a term to retirement greater than 25 years, Life Plan cover of R2 000 000 and a medium level of Life Plan ancillary benefits cover, his Life Plan Optimiser percentage is 42.5%.

At retirement:

• Peter receives an amount of R754 699 (the Retirement Upfront Investment Integrator boost plus growth) into his Discovery Core Retirement Plan.
• His accumulated retirement savings in his Discovery Core Retirement Plan is R5 786 028 (accumulated savings including the Retirement Upfront Investment Integrator),
• His accumulated retirement savings in his Discovery Retirement Optimiser is R8 307 416.
• From the Life Plan Optimiser he then receives tax-free instalments from age 65, which are paid to him annually for the rest of his life of R353 065 (=R8 307 416 * 42.5% /10) beginning at age 65 and increasing each year by inflation

Using his total accumulated retirement savings from his Discovery Core Retirement Plan including the Retirement Upfront Investment Integrator, and his Discovery Retirement Optimiser , Peter then takes out a Discovery Linked Retirement Income Plan at age 65, with an initial annual annuity income drawdown of 3%.

Since Peter is on Silver Vitality status he gets a Retirement Income Investment Integrator boost of 40% or R168 896 to his first year annuity income. He receives these additional boosts to his annuity income for the first 10 years in retirement.

In total, Peter receives additional boosts of R1 671 512 added to his annuity income over the first 10 years of retirement from the Retirement Income Investment Integrator.

Summary:

• Peter’s fund value will be 15% larger, allowing for the boost from the Retirement Upfront Investment Integrator
• His fund value with Integration is higher from retirement onwards due to the Retirement Upfront Investment Integrator boost at retirement, the tax-free Life Plan Optimiser instalments and the income boosts for the first 10 years in retirement from the Retirement Income Investment Integrator.
• Peter’s total income inclusive of all benefits and net of tax will increase from R388 461 to R896 911 in the first year
• Over the first 10 years in retirement Peter will receive double (102% more) through the Retirement Income Investment Integrator and the Discovery Retirement Optimiser (a rand value of R6 217 352 more).
• Therefore, through Discovery’s Retirement Upfront Investment Integrator, Retirement Income Investment Integrator and the Discovery Retirement Optimiser, Peter is able to ensure that he will have an enhanced real annuity income throughout his retirement.

For more information on investing, speak to your financial adviser.

Discovery Invest is an authorised financial services provider. Registration number 2007/005969/07. For more information on Discovery Invest, contact your financial adviser.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell investment funds.