Key retirement decisions that can impact your financial future

THE transition into retirement often comes with a wave of uncertainty, heightened by the number of interconnected financial decisions that must be made at this stage.

- SHERRY TAPFUMA

Many of these choices will have long-term implications for your financial security, your liquidity, and your ability to leave a legacy. Here we explore three of the most important decisions you'll face and the key factors to weigh before acting.

1. Retiring from a retirement annuity:

Choosing when to retire from a retirement annuity (RA) is a decision that needs to be carefully timed. Unlike pension and provident funds, where the retirement age is set by the fund’s rules, an RA can be retired at any time from age 55, with no upper age limit. This flexibility makes timing a crucial part of both retirement and estate planning.

While your funds remain in an RA, they must be invested in line with Regulation 28 of the Pension Funds Act, which limits offshore and equity exposure. However, once you retire from the RA, one of the options is to commute your capital into a living annuity, where investment choices are no longer bound by Regulation 28, allowing for greater offshore exposure and potentially higher-risk strategies.

2. Taking a cash commutation: