Don't Guess Your Income, Guarantee It

Many retirees may count on good luck or chance when it comes to financing their retirement –   market performance, inflation, and even how long your money needs to last. But the market is often unstable, inflation fluctuates, and lifespans are increasing. To minimise the luck factor when planning for retirement, you need to mitigate the very real possibility of having more life than life savings. Does your current retirement plan actually give you peace of mind that you’ll have an income for your entire retirement?

The rollercoaster of guessing 

Investment markets are unpredictable. One moment you’re riding the highs, the next you’re tumbling into a downturn. That kind of volatility may be thrilling when you’re building wealth, but it’s a big risk if you’re relying on that wealth to fund your expenses in retirement.

Too often, people relinquish logic and rely on guesswork when planning their retirement, which is why it is vitally important to consult with a financial adviser. 

Here are two common scenarios that can derail your financial future:

1. Market fluctuations 

Investment markets are unpredictable, and the order of your returns in the early years of your retirement can have a particularly disproportionate effect on how long your savings last. This is known as the sequence-of-returns risk, and it's one of the most significant factors that can determine whether your money will last your full retirement.

If you're lucky enough to retire at the start of a bull market, your retirement portfolio may benefit from compounding gains. But if you retire into a bear market, poor returns early on can drastically impair your financial stability, even when the markets eventually recover.

Market performance shouldn’t dictate your retirement outcome

This kind of market-timing risk in retirement is out of your control. A proven way to reduce this luck-based exposure is to incorporate a guaranteed annuity into your retirement plan. Unlike living annuities, guaranteed annuities are not affected by market fluctuations. They pay out a guaranteed income for life — no matter what happens in the market.

2. Withdrawing too much too soon 

Your retirement income can fall short if your withdrawal rate is too high, especially during market downturns. The more you withdraw, the more pressure you place on your portfolio to perform. If returns are poor, your capital can deplete quickly, forcing you to cut back on withdrawals or risk running out of money entirely.

This is why managing your retirement income risk is critical. Overdrawing from a living annuity makes you increasingly dependent on favourable market conditions, which is another way of saying: you’re simply relying on luck.

And luck isn’t a sound strategy.

If your income needs are high, it might be time to reevaluate your asset allocation. For many retirees, combining a living annuity with a guaranteed annuity — known as a blended annuity solution — can offer the best of both worlds: flexibility and stability, in one product. 

With a guaranteed annuity, your income is not subject to your withdrawal decisions or the market. Instead, it’s a reliable, predictable income stream for life. 

How to shift from guessing to guaranteeing

Here are four steps you can take to reduce your reliance on luck and increase retirement income certainty:

1. Check your withdrawal rate

To help your retirement income last for life, it’s essential to withdraw at a sustainable rate if you’re in a living annuity or drawing from personal savings. 

Women typically live longer than men. At age 65, women have an average life expectancy of 87 years, compared to 82 years for men. In fact, one in four women will reach age 94, and one in ten may live to 100. This means their retirement income needs to stretch over a longer period — by an average of five years. A lower withdrawal rate makes provision for this extended lifespan and reduces the risk of depleting your savings too soon. 

With this in mind, here’s how men and women should withdraw for a sustainable retirement:

• For men retiring at age 65, the recommended sustainable withdrawal rate is 5.5% per year.

• For women, it’s slightly lower at 5% per year.

If you’ve saved R1 million for retirement:

• A man should aim to draw no more than R55,000 per year (or R4,583 per month).

• A woman should aim for no more than R50,000 per year (or R4,167 per month).
  
  
  

2. Plan with the five phases of retirement in mind

Phase one: Pre-retirement 

This is the time to begin taking steps to ensure a financially secure future. Think about: where you might like to live, which hobbies you would like to pursue, or which meaningful experiences you would like to have so you can budget for essential and discretionary spending. This will help guide your decisions on which retirement income solution is most suitable for your personal circumstances. Seeking assistance from a financial adviser is recommended at this stage. 

Phase two: The transition phase 

This phase represents the transition from the daily grind into retirement. How will you use your retirement savings to ensure you have a sustainable monthly income? Regulations state that at least two-thirds of your formal retirement savings from a pension fund or a retirement annuity must be used to purchase an income-generating product, which is a life annuity, a living annuity, or a blended annuity. 

Phase three: The active phase

By this point, you’ve most likely bought your pension (in the form of a life annuity, a living annuity, or a blend of both, as mentioned above). It can be expensive to fund a lifestyle that isn’t confined by office hours. Whether it's for your travel dreams or new hobbies, you might need to plan for giving yourself a bit more financial flexibility in this phase, which can last up to ten years.

Phase four: The passive phase

In this phase, you’re probably slowing down a little and spending less on travel, hobbies, and new experiences. But even with lower day-to-day expenses, this stage of your life comes with a new set of risks and expenses. Medical expenses often rise significantly, especially as you deal with age-related health issues. You also need to factor in medical inflation, which is higher than regular inflation.

A good rule of thumb: expect healthcare costs to increase annually by 2% to 3% more than inflation.

At this stage, relying purely on the market for income (via a living annuity) can expose you to sequence risk. If your portfolio value dips just as healthcare costs rise, you could be forced to draw down on your capital at unsustainable rates

Phase five: Late retirement   

In this stage, you might decide to switch from a living annuity to a life annuity as cognitive decline could set in. This way, you can rely on a guaranteed monthly income for life and avoid actively having to manage your money. You might also be thinking about leaving a financial legacy, but you still need to look after yourself financially.

3. Convert part of your portfolio into guaranteed income over time

A blended annuity strategy is an innovative configuration, combining two well-established instruments: 

• A guaranteed income component, which provides lifelong, inflation-protecting income and an optional income legacy.

• An investment-linked portfolio, which offers growth potential and capital legacy.

This strategy provides flexibility and security, as it allows income to be drawn from the entire solution. The secure income then comes from the life annuity and can either be reinvested into the portfolio or used to supplement your overall drawdown. 

You can phase in guaranteed income as your needs evolve or as you move through the five phases of retirement.

4. Review your retirement plan regularly

Financial plans are not something you set and forget. Regularly reviewing your retirement financial plan with a qualified adviser is one of the most effective ways to stay on track and avoid unpleasant surprises. Life changes, market shifts, and evolving income needs can all impact your long-term financial security. By checking in consistently, you ensure your plan remains aligned with your goals and you can make timely adjustments—whether it's rebalancing investments, reviewing your drawdown strategy, or guaranteeing some of your income. A proactive approach today helps protect your peace of mind tomorrow.

Sustainability and peace of mind

A financially sustainable retirement plan isn’t just about income today: it’s about ensuring that your income lasts for the rest of your life. That means building a retirement income strategy that is stable, resilient, and not overly dependent on market performance, so you can avoid the ups and downs.

Just SA’s life annuity and blended annuity solutions through our partnerships help provide retirees with income sustainability. By locking in a portion of your portfolio to deliver guaranteed income, you reduce your exposure to volatility and ensure that no matter how long you live, your baseline income will never run out.

This level of predictability also brings something equally valuable: peace of mind. When your income is guaranteed, you can stop worrying about monthly drawdowns and start focusing on the quality of your retirement, so you can spend time on the things that matter, instead of watching markets and adjusting your withdrawals.

A sustainable retirement income plan gives you control, confidence, and the freedom to enjoy life — without financial guesswork.

Locking in income = guarantee, don’t guess 

Just SA’s mission is to help South Africans ‘rethink retirement’, focusing on dignity, security, and happiness in later life by promoting longevity-aware financial planning. 

We focus on solutions that deliver financial security, stability, and longevity protection through innovative guaranteed annuity solutions, also known as life annuities or lifetime income. Lifetime income is a post-retirement monthly payment that provides a guaranteed and stable income in retirement – an income for life, no matter what happens.

Guaranteed annuities provide peace of mind and lessen financial stress in your golden years. Your income won’t fluctuate monthly with the markets. Instead, it’s locked in for life. The annual increase in income depends on the type of guaranteed annuity you select.

Don’t guess your income, guarantee it

Your retirement plans are far too important to leave to chance. By adding or blending guaranteed life annuities into your portfolio, managing your withdrawal rate, and working with trusted professionals, you can create a retirement plan that delivers peace of mind and pays out for life.

Planning for a secure retirement requires careful consideration of your income options, especially those that can adapt to your changing needs over time. Just SA offers a range of guaranteed life annuity solutions for your financial needs. 

Just Lifetime Income (JuLI)

JuLI is a with-profit guaranteed annuity designed to provide a stable, lifelong income with annual increases linked to the underlying returns of a chosen balanced fund. 

Increase options:

• HiGro: Lower starting income, higher future increases.
• HiYield: Higher starting income, lower future increases.
• StableGro: Balanced starting income and increases.
• JuLI Advance: Higher starting income now in exchange for capped increases later.
  
  

Just Fixed Increase Income Annuities

These offer guaranteed income for life with predictable annual increases:

• Level Income: Fixed monthly payments, ideal for those with stable expenses.
• Fixed Escalation Income: Income increases by a chosen percentage (1–10%) annually.
• Inflation-linked Income: Increases match the annual Consumer Price Index, offering protection against inflation.

As the only provider in South Africa to underwrite at retirement, Just SA ensures your income reflects your unique health and lifestyle factors, which provides a fairer, and sometimes higher, starting income.

Speak to your financial adviser about our lifetime income options, or contact us to request a quote.