preservation fund
Legislation permits that the owner of a living annuity can draw down between 2.5% and 17.5% of the value of his living annuity every year, with the option to review the draw down rate at the living annuity’s anniversary. Investors
Before retiring, it is important to carefully assess your capital needs – both at the point of retirement and into the future. Remember, you are not permitted to make lump sum withdrawals from a life annuity or living annuity, so
If you intend to retire from the fund and begin drawing down from your investments, keep in mind that your options are essentially the same as when retiring from a retirement annuity in that you have the option to commute
Unlike a life annuity (which is an insurance policy designed to provide a guaranteed income for life), a living annuity is an investment held in the investor’s name which is generally linked to an underlying investment on a LISP platform
Trying to guess how long you will live is a dangerous game to play when developing your retirement plan, and our advice is to develop a range of retirement scenarios using varying longevity assumptions so that you have a clear
One of the most significant advantages of a preservation fund is that you are permitted to make one full or partial withdrawal from the fund before age 55. If there is a likelihood that you may need access to your
While there is no legislated retirement age in South Africa, keep in mind that many employers have a pre-determined retirement age at which point employees are required to retire from the company. Where the employer sponsors a retirement fund, such
Through the retirement fund harmonisation process, the options at retirement have been streamlined across pension, provident and retirement annuity funds, although there remain certain technicalities when dealing with the vested benefits in respect of provident fund contributions made prior to
Ideally, avoid using rules of thumb when determining your post-retirement income needs, and consider your actual situation. Firstly, make a list of those expenses that are likely to fall away when you retire, such as bond and car repayments, long-term
Ensuring that you remain adequately protected in respect of death and disability throughout the transition period is equally important as any lapse in cover can leave you at financial risk. Before joining your new employer, ask for all details pertaining
