The Old Mutual Max Investments Flexible Plan is distinct from the Old Mutual unit trusts retirement annuity fund in that it includes unit trusts administered by third-party service providers. This option gives plan subscribers additional investment options.
Tax benefits will be available to investors both before and after retirement. Investors can deduct their contributions to the flexible plan for income tax purposes, lowering their taxable income. Furthermore, the earnings from the plan are not taxed, so the investor will have more money in retirement.
The investor manages the plan since he or she decides where the money is invested.
The investor has the option of investing in funds managed by Old Mutual or funds managed by other financial organizations. The investor’s investing options are thus broadened.
In contrast, the product adheres to the standards outlined in Regulation 28 of the Pension Funds Act. The regulation imposes various restrictions and is expected to influence how the funds are invested. As a result, funds that invest in domestic assets will be prioritised over funds that invest in international assets.
The benefits provided by the Old Mutual max investment flexible plan are easily distinguishable. Customers who have a significant amount of money invested in unit trusts from other financial institutions will benefit from this product. We go over the Old Mutual max investments flexible plan in detail below.
Old Mutual max investments flexible plan summary
The Old Mutual max investments flexible plan is a retirement annuity with a monthly contribution requirement of R500.00. Contributions to the flexible plan can also be made on an ad-hoc and one-off basis. An investor can combine contribution methods at any time without incurring any switching fees.
The Old Mutual max investment flexible plan invests in Old Mutual-managed funds while also allowing customers to participate in funds that are not managed by Old Mutual. Allan Gray, Investec, Coronation, PSG Wealth, and other funds are available to investors.
When investing in the funds, Regulation 28 of the pension fund legislation must be followed. The legislation states that an investment subject to this regulation cannot have more than 45% of its portfolio invested overseas. This rule will have an impact on the funds you choose.
You will have complete control over the portfolio as a policyholder while investing in the funds. Policyholders can access the Old Mutual digital platforms at no additional cost. Investors can access their investment portfolio through Old Mutual’s digital platforms at any time.
Transferring money from one fund to another is possible. This is a free activity that can be done at any time during the investment cycle. Money can be lost if it is not invested properly, and Old Mutual is not liable for any losses.
Money deposited in the Old Mutual max investments flexible plan can be redeemed at retirement. The retirement age is 55 years old, and the investor can withdraw the funds at any time after that.
How the Old Mutual Max Investments Flexible Plan Works
Only a call back request or a visit to an Old Mutual branch may be used to acquire the Old Mutual max investments flexible plan. Because the product isn’t accessible online, it can’t be purchased there. An application must be completed and signed, and the beneficiaries of the product must be included.
Beneficiaries are the people who will get the money from the retirement annuity if the main policyholder dies. Anyone whom the investor selects to benefit from the plan is considered a beneficiary. Alternatively, a trust might be named as the plan’s beneficiary.
When submitting an application, the investor must select the funds into which he or she wants to invest. Old Mutual-managed and-administered funds are available, although non-Old Mutual-managed and-administered funds are also accessible. Other firms’ funds, such as Sanlam, Allan Gray, and others, are also accessible.
The application may be emailed to Old Mutual’s appropriate email address after selecting the funds to invest in and completing the application forms. The plan becomes active once the application is accepted, and the applicant becomes a member of the product.
The investor will have to contribute to the plan on an as-needed, monthly, or yearly basis. Contributions must be made until the age of retirement. Failure to contribute will have no effect on the plan, which will continue to operate until the participant reaches retirement age.
The policyholder can withdraw from the plan when he or she reaches the age of 55. The policyholder, on the other hand, might choose to retire later to take advantage of the markets and compounding impact. The plan’s proceeds will flow directly to the beneficiaries if the investor dies.
Advantages of the Old Mutual max investments flexible plan
- To a limited extent, contributions to the flexible plan are tax-deductible.
- Access to the Old Mutual digital platforms is included with the purchase.
- There are various onshore and offshore funds to select from.
- The investor has complete control over his or her investment, including the ability to shift cash from one fund to another.
- The minimum investment commitment of R500.00 is affordable.
- Investors can also put their money into unit trusts run by other firms. The Allan Gray Balanced Fund, for example.
Disadvantages of the Old Mutual max investments flexible plan
- Since the investment has no capital guarantees, money invested may be lost or may not earn the intended interest.
- The product cannot be purchased entirely online, so you will need to contact a consultant to acquire it.
- The program does not include a cashback benefit, which might significantly increase the value of the living annuity.
Conclusion
The Old Mutual max investments flexible plan allows investors to mix and match their assets in a way that no other Old Mutual retirement annuity can. The product allows clients to invest in unit trusts that are not administered by Old Mutual. Those that are familiar with mutual funds can gain beyond what Old Mutual unit trusts offer.
