The role of preservation funds in shaping financial legacies

By Ndadhi Ndoroma, General Manager: Personal Financial Advice, Old Mutual Namibia

In the world of financial planning, the preservation of wealth stands as a vital component in establishing a durable financial legacy.

With their strategic position, preservation funds emerge as prosperity guardians, guaranteeing future generations’ financial well-being. This article will explore the critical function preservation funds play in preserving and transferring wealth.

Preservation funds are essential to financial planning. These funds are fundamentally about protecting assets from unwarranted depletion and volatility.

Preservation funds, in contrast to conventional investment vehicles, place a higher priority on capital preservation and provide protection from market and economic volatility.

The flexibility of preservation funds to adjust to the evolving needs and objectives of individuals is a crucial feature. Preservation funds are flexible instruments that complement the ever-changing landscape of financial planning, whether one is planning for retirement, financing school, or guaranteeing a seamless wealth transfer.

Preservation funds offer a tax-efficient avenue for transferring benefits from a previous retirement fund, streamlining the process for individuals looking to preserve their savings.

With a low minimum investment threshold, preservation funds cater to a wide range of investors, ensuring accessibility for many.

The flexibility inherent in preservation funds allows investors to make multiple withdrawals within the initial three years, providing liquidity when needed, which is particularly advantageous for those navigating changing financial circumstances.

Additionally, a one-time administration fee simplifies the setup process, making it hassle-free for investors. Preservation funds also have the potential to deliver inflation-beating returns, safeguarding the long-term value of investments against rising prices.

Moreover, immediate withdrawal options add further convenience, granting investors timely access to their funds when required, aligning with the core purpose of preservation funds.