Retire in hard currency with the Dollar Discovery Retirement Optimiser
On 17 March 2015 Discovery Invest announced their new globally-focused retirement product, the Dollar Discovery Retirement Optimiser, which aims at building up a retirement nest egg in hard currency.
This innovative investment product is built on the back of Discovery Life’s Dollar Life Plan. It allows for your clients to save offshore on a recurring monthly basis. The Dollar Discovery Retirement Optimiser converts a client’s unused Dollar Life Plan cover into retirement income in US dollars from age 65 onwards, boosting retirement savings in hard currency.
With the Dollar Life Plan, Discovery Life introduced the first-of-its-kind global insurance product that is designed to match your client’s offshore liabilities. This could include the associated costs of education of children or dependants living overseas.
Now, with the launch of the Dollar Discovery Retirement Optimiser, clients have access to a product that focuses on maximising a client’s retirement savings through fee discounts and boosted fund values in hard currency.
The US currency-linked product achieves this through two unique benefits: the Dollar Retirement Investment Integrator and the Dollar Life Plan Optimiser.
The Dollar Retirement Investment Integrator provides discounts on all fees until the age of 65. These discounts start at 20% and increase in line with contribution size up to 80%. The Dollar Life Plan Optimiser also boosts your client’s income from age 65 by providing tax-free instalments every year over ten years with increases at the US inflation rate each year. These payments are created through converting unneeded risk cover from the client’s Dollar Life Plan into cash.
The product offers three risk-profiled Dollar-denominated funds that are built from Exchange Traded Funds (ETFs). These are dynamically managed on an ongoing basis to maintain the correct risk profile.
The Dollar Discovery Retirement Optimiser is structured as an offshore endowment policy. Contributions are not tax deductible but no further tax is payable by clients on proceeds from the offshore endowment policy under current tax practice.
Contributions are denominated is US Dollars but deducted from your client’s bank account in South African Rands in line with the rand-dollar exchange rate. The product is designed to use your client’s single discretionary allowance, which is facilitated by Discovery so there is no need to apply for a tax clearance certificate in most cases.
(excerpt taken from eDiscoverer of the 20/03/2015)