Investing half a million.

Priapus

Priapus

Honorary Master
Joined
Jun 8, 2008
Messages
21,937
Reaction score
16,934
Location
England
Hey all,

So my SO's mother has recently retired after she was retrenched from her last job. She is unable to work and her pension funds are not enough to support her for the rest of her life.

She is looking at selling her property and buying a much smaller place for herself. With the remaining cash after that, she should have around, R500k in the bank. Obviously she wants to invest this over a long term so that she can have money each month and support herself for the rest of her life.

She does want to go see a financial advisor at some stage. I was just wondering if anyone here has any suggestions on the best way for her to invest the cash? Something not too high risk as this is all the money she will have for the foreseeable future.

Edit: She would like to also know if its possible to pay a lump sum into an RA and receive money from it every month.

Appreciate any thoughts,
Thanks. :)
 
Last edited:
Best advise is not to take advise from an open forum :eek:

Hope she got paid her retrenchment package in full ?
 
I think if she got around 3k or so each month she would be okay. She did get paid out. But it wasn't much. We will go see a financial adviser. Just trying to find out a few things before that.
 
Tander said:
Hey all,

So my SO's mother has recently retired after she was retrenched from her last job. She is unable to work and her pension funds are not enough to support her for the rest of her life.

She is looking at selling her property and buying a much smaller place for herself. With the remaining cash after that, she should have around, R500k in the bank. Obviously she wants to invest this over a long term so that she can have money each month and support herself for the rest of her life.

She does want to go see a financial advisor at some stage. I was just wondering if anyone here has any suggestions on the best way for her to invest the cash? Something not too high risk as this is all the money she will have for the foreseeable future.

Edit: She would like to also know if its possible to pay a lump sum into an RA and receive money from it every month.

Appreciate any thoughts,
Thanks. :)
Click to expand...

If you have a big place she can stay with you and rent out her place?
 
buyeye said:
If you have a big place she can stay with you and rent out her place?
Click to expand...

Thats not an option at this stage for us. She wants to move to Durban in a small flat as she prefers it down there.
 
Tander said:
Thats not an option at this stage for us. She wants to move to Durban in a small flat as she prefers it down there.
Click to expand...

Then the real option is a financial adviser as she cannot do high risk at this stage.
 
Tander said:
I think if she got around 3k or so each month she would be okay. She did get paid out. But it wasn't much. We will go see a financial adviser. Just trying to find out a few things before that.
Click to expand...
That R3K pm would need to increase by at least the inflation rate if she is to maintain her standard of living
 
Money markets generally pay 6% interest. So on a sum of R500k that's 2.5k interest a month. She'll have access to all the money in 2 days from notice generally. Buys and sells for more or less same price so no risk.
 
Roger Moore said:
Money markets generally pay 6% interest. So on a sum of R500k that's 2.5k interest a month. She'll have access to all the money in 2 days from notice generally. Buys and sells for more or less same price so no risk.
Click to expand...


If she is taking out the interest then won't her 2.5k be worth 1.5k in 5 to 10 years?
 
My dad (approaching retirement age) has some (not everything) of his investments with Allan Gray and he's pretty happy them. Perhaps have a chat with them to see if they fit her needs.

-G-
 
Finbond Bank pay 10.75% interest on amounts of R100k and above, and pay you interest monthly. Therefore on R550k you will receive R 4480 a month approximately, less 15% withholding tax. This is a 5-year participation investment
 
chrisc4290 said:
Finbond Bank pay 10.75% interest on amounts of R100k and above, and pay you interest monthly. Therefore on R550k you will receive R 4480 a month approximately, less 15% withholding tax. This is a 5-year participation investment
Click to expand...
Wut?
Then I'm gonna max my bond and put it in there
 
chrisc4290 said:
Finbond Bank pay 10.75% interest on amounts of R100k and above, and pay you interest monthly. Therefore on R550k you will receive R 4480 a month approximately, less 15% withholding tax. This is a 5-year participation investment
Click to expand...

That is the best interest rate I have ever seen on such a small amount of money. Who is Finbond? Sounds like they are desperate for your money.
 
chrisc4290 said:
Finbond Bank pay 10.75% interest on amounts of R100k and above, and pay you interest monthly. Therefore on R550k you will receive R 4480 a month approximately, less 15% withholding tax. This is a 5-year participation investment
Click to expand...

This does sound promising. I wonder how safe the investment is?
 
Tander said:
This does sound promising. I wonder how safe the investment is?
Click to expand...

A micro loan company operating in South Africa, with customers who don't pay their debts. I will never take that risk.
 
Tander said:
Edit: She would like to also know if its possible to pay a lump sum into an RA and receive money from it every month.
Click to expand...

A retirement annuity is not really an annuity until you hit retirement age when it coverts to one.

It's an investment vehicle for generating money for the annuity upon retirement.

Since she is already retirement age she doesn't need an RA but just the annuity part of it and I highly recommend that for this very reason she goes to one or the big companies with her money (Investec, Allan Grey, Old Mutual etc) to invest this money into an annuity exactly as she would at the end of an RA contract term.

This will give her an exact lifespan based calculation of what she will get every month and how that will be paid going forward and when it will run out etc.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X