I know from several years of working with advisers that many other tasks infringe on your sales time, and that a lot of time spent on a quote doesn’t always mean a lot of income for you.

The Just Retirement Enhanced With-Profit Annuity is available to all applicants, not only those who have health and lifestyle factors that would typically qualify them for an enhanced annuity. 

Five percent. This is the maximum drawdown rate recommended by the Association for Savings and Investment South Africa (ASISA) on a living annuity, if the income is to last the rest of the annuitant’s lifetime.

What is the best type of guaranteed annuity for your client?  

On 9 August 1956, more than 20 000 women marched to the Union Buildings in protest against the extension of Pass Laws to women. South Africa commemorates Women's Month in August in tribute to these women and their pursuit of fairness and justice.

We are often asked by advisers how to compare the income that can be secured through a Just Retirement Enhanced With-Profit Annuity to the income that can be drawn from a living annuity.

Volatile financial markets in the wake of the Brexit ‘Leave’ vote are a reminder for living annuitants not to risk retirement savings they can’t afford to lose.

Living annuities became popular in South Africa in the 1990s. Many who have bought living annuities are now in the age range of 75 to 85. The example of Eddie and Priscilla that we sketched in our previous e-mail demonstrates clearly how living annuitants in South Africa face a significant risk of outliving their assets.

Considering the risks of living annuities – outliving one's money, and ongoing uncertainty in the markets – is a living annuity an option, or should retirees seek safety in a guaranteed annuity? 

I’d like you to think about Jacob and Margaret – they have a lot in common. They both:

  • purchased living annuities at retirement;
  • are now 75 years old;
  • have living annuity investment portfolios consistently earning 9% pa after all advice, investment and administration costs;
  • need R14,500 per month to cover living expenses, increasing with inflation at 6% pa. To meet this:
    • Jacob currently draws 8.7% pa from his living annuity of R2m.
    • Margaret currently draws 7.9% pa from her living annuity of R2.2m.