00:00:01
Speaker 1: You're with John Pullman on 702.
00:00:03
Speaker 2: Let's walk the talk. Three minutes to five. People are living longer. Have you planned for retirement or for a long retirement? Personal Finance on 702 Drive with me, John Pullman, is brought to you by Discovery Invest. Retire strong. Living longer is a success, but it can also create financial risk if a person outlives their retirement savings. Discovery Invest's Retire Strong campaign provides highlights the importance of planning for an uncertain lifespan rather than assuming retirement will last a fixed number of years. Esty Sevenster, Head of Technical Marketing at Discovery Invest, joins us now to explain why a sustainable retirement income plan must account for how long people may live. Esty, good to have you back. I mean, it really is... A little bit of a conundrum and possibly even a little bit cruel because we want to live well. We'd also like to live longer, but it does appear as if the two, unless we're careful, could somehow conflict with each other. Very good afternoon to you. How do we make sure longevity doesn't become a financial risk?
00:01:11
Speaker 1: Hi, John. It's always great to be here. Yeah, so that is the paradox. People are living much longer, which is something to celebrate with medical advancements, improvements in medicine. In healthcare standard of living, people are definitely getting a lot older. A hundred years ago, people were only living to age 34. We're seeing the average global life expectancy sitting at around 74 years. So retirement terms are so much longer. They're around 25 to 30 years, which is really a big risk. So there's a real risk of outliving your retirement savings when you only plan for a certain date and not for the uncertainty of this much longer retirement term of around 25 to 30 years. We also see globally people are outliving their retirement savings by around 10 years. So it really just makes it so clear how you need to plan for a much longer retirement term.
00:02:10
Speaker 2: Do lots of people underestimate how long they may live? And do we have any, A, any idea why, and B, what that might do to plans?
00:02:19
Speaker 1: Yeah, absolutely. What we've seen in research done quite recently by Stanford University was that females around age 65, around 50% of them underestimate how long they will live. Around 66% of 65-year-old males underestimate how long they will live. And it impacts the retirement planning in the sense that if you think you're going to live a lot shorter than you actually will, you don't save enough. When you are retired, you withdraw too much. You possibly don't actually take enough investment risk so that your investment can earn sufficient returns to last this much longer retirement term. And often people also don't think about long-term care costs when.
00:03:09
Speaker 1: They get to these older ages. We see that there's also a significant cost and a significant chance of needing long-term care.
00:03:18
Speaker 2: I thought we were meant to work incredibly hard so we can retire and have nothing to worry about, but clearly some planning is needed. At Discovery, you've created something called the Lifespan Linked Income Plan. What is it and why do you think it's a solution?
00:03:35
Speaker 1: So the Lifespan Linked Income Plan gives our clients a little bit of the best of both worlds. So I'll try and explain it really quickly and simply. But in retirement, there are two types of products you can choose. You can choose a living annuity. That gives you the flexibility. That is the product where you have your retirement money and you can choose how much you withdraw. You can withdraw between 2.5% and 17.5%. And you have the control and flexibility. You also have the control in how you invest your money. The other type of product that you get is a fixed annuity. This for your lump sum at retirement or the money that you've saved. You invest that and you get a guaranteed amount of money for as long as you live. It gives you very little flexibility. So what the Lifespan Linked Income Plan does is combine the two products to give you, it is a living annuity. But from age 80, it gives you a guaranteed income for the rest of your life. So it gives you that flexibility in the early years where you can choose how much you withdraw.
00:04:37
Speaker 2: Right.
00:04:38
Speaker 1: Where you need the flexibility, maybe you're still quite active, you want to travel, you could have older kids living in your house. And then at older ages, you have the safety net of the guaranteed income that pays from age 80 for the rest of your life.
00:04:53
Speaker 2: Thank you so much, SDC Evan Stair, Head of Technical Marketing at Discovery Invest. Now, you can spend decades learning how to save, but retirement asks a different question. How will those savings become an income? Saving and drawing an income are separate decisions, and a financial advisor can help you work through them. Discovery Invest rewards responsible retirement behavior before and during retirement. Ask your financial advisor whether your plan covers the move to income, not only the date. Discovery Invest. Retire strong. Vote at South Africa's best investment experience. 2026 Ask Africa Orange Index. Discovery Invest is an authorized financial services provider. Product rules, eligibility criteria, terms and conditions apply.
Speaker 1: You're with John Pullman on 702.
00:00:03
Speaker 2: Let's walk the talk. Three minutes to five. People are living longer. Have you planned for retirement or for a long retirement? Personal Finance on 702 Drive with me, John Pullman, is brought to you by Discovery Invest. Retire strong. Living longer is a success, but it can also create financial risk if a person outlives their retirement savings. Discovery Invest's Retire Strong campaign provides highlights the importance of planning for an uncertain lifespan rather than assuming retirement will last a fixed number of years. Esty Sevenster, Head of Technical Marketing at Discovery Invest, joins us now to explain why a sustainable retirement income plan must account for how long people may live. Esty, good to have you back. I mean, it really is... A little bit of a conundrum and possibly even a little bit cruel because we want to live well. We'd also like to live longer, but it does appear as if the two, unless we're careful, could somehow conflict with each other. Very good afternoon to you. How do we make sure longevity doesn't become a financial risk?
00:01:11
Speaker 1: Hi, John. It's always great to be here. Yeah, so that is the paradox. People are living much longer, which is something to celebrate with medical advancements, improvements in medicine. In healthcare standard of living, people are definitely getting a lot older. A hundred years ago, people were only living to age 34. We're seeing the average global life expectancy sitting at around 74 years. So retirement terms are so much longer. They're around 25 to 30 years, which is really a big risk. So there's a real risk of outliving your retirement savings when you only plan for a certain date and not for the uncertainty of this much longer retirement term of around 25 to 30 years. We also see globally people are outliving their retirement savings by around 10 years. So it really just makes it so clear how you need to plan for a much longer retirement term.
00:02:10
Speaker 2: Do lots of people underestimate how long they may live? And do we have any, A, any idea why, and B, what that might do to plans?
00:02:19
Speaker 1: Yeah, absolutely. What we've seen in research done quite recently by Stanford University was that females around age 65, around 50% of them underestimate how long they will live. Around 66% of 65-year-old males underestimate how long they will live. And it impacts the retirement planning in the sense that if you think you're going to live a lot shorter than you actually will, you don't save enough. When you are retired, you withdraw too much. You possibly don't actually take enough investment risk so that your investment can earn sufficient returns to last this much longer retirement term. And often people also don't think about long-term care costs when.
00:03:09
Speaker 1: They get to these older ages. We see that there's also a significant cost and a significant chance of needing long-term care.
00:03:18
Speaker 2: I thought we were meant to work incredibly hard so we can retire and have nothing to worry about, but clearly some planning is needed. At Discovery, you've created something called the Lifespan Linked Income Plan. What is it and why do you think it's a solution?
00:03:35
Speaker 1: So the Lifespan Linked Income Plan gives our clients a little bit of the best of both worlds. So I'll try and explain it really quickly and simply. But in retirement, there are two types of products you can choose. You can choose a living annuity. That gives you the flexibility. That is the product where you have your retirement money and you can choose how much you withdraw. You can withdraw between 2.5% and 17.5%. And you have the control and flexibility. You also have the control in how you invest your money. The other type of product that you get is a fixed annuity. This for your lump sum at retirement or the money that you've saved. You invest that and you get a guaranteed amount of money for as long as you live. It gives you very little flexibility. So what the Lifespan Linked Income Plan does is combine the two products to give you, it is a living annuity. But from age 80, it gives you a guaranteed income for the rest of your life. So it gives you that flexibility in the early years where you can choose how much you withdraw.
00:04:37
Speaker 2: Right.
00:04:38
Speaker 1: Where you need the flexibility, maybe you're still quite active, you want to travel, you could have older kids living in your house. And then at older ages, you have the safety net of the guaranteed income that pays from age 80 for the rest of your life.
00:04:53
Speaker 2: Thank you so much, SDC Evan Stair, Head of Technical Marketing at Discovery Invest. Now, you can spend decades learning how to save, but retirement asks a different question. How will those savings become an income? Saving and drawing an income are separate decisions, and a financial advisor can help you work through them. Discovery Invest rewards responsible retirement behavior before and during retirement. Ask your financial advisor whether your plan covers the move to income, not only the date. Discovery Invest. Retire strong. Vote at South Africa's best investment experience. 2026 Ask Africa Orange Index. Discovery Invest is an authorized financial services provider. Product rules, eligibility criteria, terms and conditions apply.
