Retirement marks the beginning of a new chapter in life, but it often comes with concerns about how to manage your savings effectively while maintaining a steady income. Britam’s Platinum Drawdown Plan offers a solution tailored for Kenyans looking to gain financial flexibility and security during their golden years. Regulated by the Retirement Benefits Authority, this plan is an innovative alternative to the conventional lifetime annuity, designed to help you maximize your retirement savings while offering you control over how and when you receive your income.
What is the Platinum Drawdown Plan?
The Platinum Drawdown Plan allows retirees to withdraw a portion of their retirement savings while keeping the remainder invested in a guaranteed fund. Unlike traditional annuities, where you receive a fixed income for life, this plan gives you the flexibility to determine the frequency and amount of your income withdrawals.
With a minimum drawdown period of 10 years, as mandated by the Retirement Benefits Authority, retirees can tailor their withdrawals to suit their financial needs. After this period, they have the option to continue withdrawing income, take a lump sum, or purchase an annuity.
Key Benefits of the Platinum Drawdown Plan
- Income Flexibility
One of the most significant advantages of the Platinum Drawdown Plan is the ability to adjust how and when you receive your income. You can choose to receive payouts monthly, quarterly, semi-annually, or even annually. This flexibility allows you to manage your finances better, ensuring you only access what you need and avoid unnecessary taxation on your withdrawals. - Growing Your Investment
The remaining portion of your retirement savings continues to grow in a guaranteed fund, offering security and steady returns. This ensures that even while you’re withdrawing, your investment remains productive, increasing your financial longevity. - Top-Up Options
The plan allows for top-ups from additional savings, providing an opportunity to boost your retirement fund further. This means that if you come into extra money after retirement, you can easily add it to your drawdown plan and grow your nest egg. - Tax Efficiency
Tax is only charged when you withdraw funds from your account. By carefully managing your withdrawals, you can minimize the tax impact on your savings, allowing you to enjoy more of your hard-earned money. - Post-Retirement Medical Cover
Britam offers the option to link your drawdown plan with a discounted medical cover. You can even allocate a portion of your monthly income to pay for the premium, ensuring you are covered for health expenses while safeguarding the rest of your income.
Who Can Join the Platinum Drawdown Plan?
To join the Platinum Drawdown Plan, retirees need to have a minimum investment of KES 2 million from their retirement savings. The plan is ideal for those who do not require a guaranteed lifetime income but want the flexibility of accessing their funds as needed. You can also invest funds from other sources, allowing you to create a substantial and secure retirement portfolio.
How the Platinum Drawdown Plan Works
When you invest in the Platinum Drawdown Plan, you retain control over your retirement savings while benefiting from investment growth in a secure, low-risk environment. Here’s how it works:
- Withdrawal Flexibility: You can choose how frequently you wish to receive your income—whether monthly, quarterly, or annually—based on your individual needs. You can also adjust this frequency at the start of each year.
- Top-Up: You can add additional savings to your investment at any time, boosting your overall returns.
- Investment Growth: The remaining funds in your account continue to grow in a guaranteed investment, providing a cushion for your future withdrawals.
- Post-10 Year Options: After the statutory 10-year drawdown period, you can choose to withdraw the balance in a lump sum, continue the plan, or purchase a lifetime annuity.
What Happens to the Funds Upon Your Demise?
In the unfortunate event of your death, the balance of your fund will be paid out to your nominated beneficiaries. This ensures that your loved ones benefit from your careful financial planning, securing their future even in your absence.
Why Choose the Platinum Drawdown Plan?
- Tailored for Your Retirement Needs: This plan is ideal for retirees who don’t need a fixed income but want the flexibility to adjust their withdrawals based on changing financial needs.
- Investment Security: Your funds remain invested in a guaranteed fund, offering both security and consistent growth over time.
- Comprehensive Coverage: With the option to add a medical cover, the Platinum Drawdown Plan provides peace of mind by addressing both your financial and health care needs in retirement.
- Peace of Mind for Your Beneficiaries: Upon death, the remaining balance is paid to your loved ones, ensuring they are well taken care of.
Frequently Asked Questions
1. How much can I invest?
You need a minimum of KES 2 million from your retirement savings to start. There is no maximum limit, and you can make additional top-ups from other savings.
2. How long does the drawdown period last?
The minimum drawdown period is 10 years. After this period, you can either withdraw the balance, continue with the plan, or purchase an annuity.
3. What happens to my funds if I pass away?
In the event of your death, the remaining balance is paid to your nominated beneficiaries.
4. Can I adjust my income withdrawals?
Yes, you can adjust the frequency and amount of your withdrawals at the start of each year to suit your needs.
5. Is there a risk of outliving my retirement savings?
There is a risk of depleting your savings if withdrawals are not carefully managed. However, by leveraging the investment growth in the guaranteed fund, you can extend the longevity of your savings.
Britam’s Platinum Drawdown Plan is an excellent option for Kenyans looking to balance the need for income with the desire to grow their retirement savings. Offering flexibility, security, and control, this plan ensures that retirees can manage their finances effectively while enjoying the fruits of their retirement. If you’re nearing retirement or already retired, consider the Platinum Drawdown Plan to make the most out of your savings and enjoy financial freedom in your golden years.
