Calculating your Total Investment Amount
When opening an account you’ll nominate a Total Investment Amount or 'TIA'. This is the total amount that you expect to save over the term of your investment period. For example, if you were to save $1,000 per month for 30 years then your Total Investment Amount would be $360,000.
So that’s… ($1,000 per month x 12 months in a year) x 30 years = $360,000.
The first two years-worth of contributions
The first two years-worth of contributions are invested into a fixed income instrument returning 4%. This is purposefully conservative to ensure that you and your plan get off to a good start. Please note that it is the first two years-worth of contributions in terms of your TIA that are invested into a fixed income instrument, not your actual contributions for the first two years.
So, thinking about the example above, where your Total Investment Amount is based on a monthly contribution of $1,000, your first two years-worth of contributions would total $24,000.
$1,000 per month x 24 months (2 years) = $24,000.
If you were to open your NEW Lifestyle Investment Account by depositing a lump sum of $24,000 in month one, this would be invested in the fixed income instrument. Your second actual deposit however would go directly into your portfolio as you would have already contributed two years-worth of monies in terms of your TIA.
After the first 5 years
After five years you may withdraw free of charge up to 90% of the value of your Total Investment Amount. HOWEVER, at least 10% of the Total Investment Amount must remain in the policy until maturity.
No minimum age
There is NO minimum starting age. Investing can begin at any time, right from age 0, making it suitable for funding a child’s education, for example. The maximum starting age is 65.
During the investment phase, right up until drawdown, the volatility of the underlying investments are increased in order to maximize the value of any potential returns before volatility is then lowered prior to the end of the plan to protect any investment gains.
Once the investment’s maturity date has been reached the drawdown phase is entered. The client can have the balance of their account paid out as a lump sum. It is also possible, although rare under the investment option, to have the money paid out in regular payments over a set period of time as determined by the client.
Investment strategy - Savings example
Investment Savings strategy in detail
The minimum starting age is 20 years old. You can then save for life until retirement age after which the product converts into one which pays a pension until age 85. There is a maximum starting age of 65.
Over the investment phase, up until drawdown, the volatility of the underlying investments are increased in order to maximize the value of any potential returns before volatility is then lowered prior to the end of the plan to protect any investment gains.
The drawdown phase can begin any time between the ages of 50 and 70 years old. Once the nominated retirement age is reached, the plan will start to payout on a quarterly basis. In this situation volatility is continuously lowered as the plan starts to pay out to the client; protecting any further investment gains while lowering the risk of existing investments. The option also exists to take full payment of the total pension investment at the chosen age of retirement although this is rare. When the plan reaches maturity at age 85, any remaining monies are paid out as a lump sum.
Investment strategy – Retirement example
Investment Retirement strategy in detail