A living annuity provides you with an income during retirement.
You may invest money from a retirement fund or another living annuity.
Warning: a living annuity is a flexible product, but comes with risks.
Your living annuity allows you to control your investment.
And it provides flexibility. Why? Read on.
It allows you to invest in unit trusts. You choose the composition of your living annuity.
You choose your income. Minimum 2.5%, maximum 17.5%.
Your income is paid monthly, quarterly, half-yearly or yearly. You choose the frequency.
You can change your income once a year on your living annuity’s anniversary date. Same for the frequency.
You can nominate beneficiaries.
Money left in your living annuity when you die can be paid immediately.
No need to wait for your estate to be wound up.
Reasons a living annuity may not be suitable for you:
Your income is not guaranteed for the rest of your life. Why not?
Because it depends on your investment value and the return you earn.
If you withdraw too high an income, your investment might not last.
You take on the investment risk. Your investment may not perform as you expect.
The investment value may drop. Forcing you to draw a lower income than you would like.
Investment performance fluctuates over the short to medium term.