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This article first appeared in the 1st quarter 2019 edition of Personal Finance magazine.

Investors save their whole lives in the hope of ending up with enough money to be able to sustain their lifestyles in retirement. It is generally accepted that if an investor saves 15% of their salary for their entire working life, they will have sufficient savings in order to retire comfortably. While a sufficient savings rate is vital, investors generally have more questions than answers when it comes to putting together an actual retirement plan.  

These questions may include:

  • Am I invested in the correct asset classes?
  • Will the returns I require materialise?
  • Will a market decline just before retirement affect me?
  • Should I use a life staging strategy to reduce investment risk the closer I get to retirement?

Marriott answers many of these unknowns with their income focused investment style and brings more certainty to retirement planning. Marriott’s expectations are based on the future income produced by ones savings rather than a future capital value. As income is a more certain element of return, Marriott has differentiated itself from other product providers due to its ability to provide investors with a more accurate projection of how much income your saving will be able to produce at retirement.

Income focused approach

Marriott invests in securities and businesses that produce reliable income regardless of the economic conditions or market volatility. Typically, the type of investments which demonstrate this ability are companies which focus on basic necessities, enjoy country wide distribution and have strong balance sheets. These companies tend to fare well in both recessionary and growth phases of the economic cycle and are seldom at the mercy of a new idea, trend or fashion.

Shoprite, AVI, Growthpoint and Sanlam are typical Marriott investments which display all of the above characteristics that ultimately translate into reliable growing dividends over time, as indicated in the charts below. There is a clear correlation between income growth (blue bars) and the capital growth (red line) over time. This relation follows a business truth where the value of a business grows over time at the rate at which its profits grow.  


Investing in a portfolio with reliable dividend paying stocks will therefore allow investors to project both income and capital with a high degree of certainty. An investor will have an expectation of how much income their retirement savings will generate and the likely capital value of those savings at retirement. This information must be converted into a present day equivalent, as the purchasing power of income is affected by inflation over time.  By considering the future level of income in today’s terms, it is possible to gauge early in a retirement plan whether contributions should be increased to achieve a desired lifestyle. This will help investors monitor their progress and ensure that their retirement plan will be a success.

Marriott has an intuitive online investment planning tool that can help investors see whether or not they are on track to reaching their desired level of income at retirement. Such information is critical for retirement planning and presents an opportunity to investors to see how much they need to be saving to reach their desired level of income. Knowing that one will retire comfortably with a reasonable degree of certainty reduces financial anxiety for investors.

Marriott is able to provide investors with the following information with a high degree of certainty:

The monthly income at a projected retirement age and in today’s terms

The likely capital value at a projected retirement age and in today’s terms

As an example, the projected outcomes on the Marriott Investment Planning tool for an investor that has saved R500 000 to date and is saving R5 000 a month for the next 25 years that escalates by inflation annually are shown in the table

In summary, focusing on the income characteristics of an investment portfolio will significantly reduce the complexity and unpredictability associated with retirement planning.  For more information on an income-focused savings plan that provides investors with this information, visit Marriott’s website (www.marriott.co.za) and try Marriott’s simple and intuitive investment planning tool.   

Lourens Coetzee is an investment professional at Marriott.

PERSONAL FINANCE