Living annuity

A Living Annuity is designed to provide you with a regular income upon retiring from your retirement fund (including retirement annuity, pension, provident or preservation funds) to cover your expenses. There is no tax payable on gains, but income withdrawals get taxed according to the normal tax tables.

How it works?

You can choose from a monthly, quarterly, bi- annual, or annual payment. Current law requires a minimum annual income withdrawal of 2.5%, and a maximum of 17.5% of the value of the Living Annuity.

Can I withdraw from the investment?

You are not able to withdraw from your Living Annuity policy unless the value of the policy is below the legislated minimum, in which case a full lump sum withdrawal may be requested.

Retirement annuity

This solution is designed to help you save for retirement and it has tax advantages. This investment can be used as the main investment for retirement or in addition to your employer's retirement fund.

How it works?

You can make a once-off lump sum contribution or recurring monthly contributions.

Can I withdraw from the investment?

Funds are only accessible at retirement. When you retire, you will have the option to withdraw one-third of the investment in cash, with the first R550 000 being tax-free. The remaining two-thirds will be used to purchase an annuity income for your retirement.

Preservation fund

A Preservation Fund aims to protect and preserve your pension or provident fund benefits from your existing approved retirement funds. When changing employment, it is tempting to withdraw and fund the current day-to-day life. However, it is advisable to save that money in a fund that will help you see value at the end of the term and also provide a tax-efficient way for saving.

How it works?

You transfer your retirement fund benefits and preserve them after you have terminated service – either through dismissal, retrenchment, or resignation from a job.

Can I withdraw from the investment?

You are allowed a full or partial withdrawal from your preservation fund before retirement. The earliest retirement date is usually 55, although this is subject to the fund rules.