How Living Annuities work and what investors need to know

Living Annuities: What are they, and how do they work?

Thinking about retirement income options, but don’t know where to start? Our living annuity video answers all the most popular questions from South Africans just like you. A living annuity is a retirement investment product that turns retirement savings into structured income after you retire. Your living annuity keeps your retirement savings invested in the market, potentially growing your capital while providing income.

00:00 - Intro

00:26 - What is a living annuity?

01:08 - How does a living annuity work?

02:10 - Which is better, a living annuity or a life annuity?

03:16 - What’s the difference between a retirement annuity and a living annuity?

04:05 - How do living annuity fees work?

05:31 - Living annuity withdrawal legislation

06:03 - What happens to a living annuity on death?

06:47 - What rules affect living annuities in South Africa?

07:36 - How to calculate how long my living annuity will last?

08:13 - What is the best living annuity in South Africa?

09:04 - How do you choose a living annuity drawdown rate?

09:27 - What happens to a living annuity when markets are down?

09:56 - Who should consider a living annuity?

Got more living annuity questions? Check out our living annuity FAQ page.

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Make sure your hard work doesn't go to waste. Make sure you know how much money you can save by investing in a low cost, high performance 10X Living Annuity.

Stop paying high fees, and make Future You more money

Higher fees very likely means lower returns (and here's the maths to prove it)

Paying high fees on your retirement investments (such as a retirement annuity or a living annuity) almost always means less money in your pocket, and less money for your retirement. Read more

A small percentage saving on fees, although seemingly inconsequential, could mean significantly more money for you in the future. Let’s look at an example to compare higher fees (3%) with lower fees (1%) to help illustrate this.

• Investment period of 20 years
• Initial lump sum investment of R5 million
• Return of 12% per annum
• An inflation rate of 4%
• Drawdown rate of 4%

Example 1 (1% Fees): Real investment value is approximately R8.2 million

Example 2 (3% Fees): Real investment value is approximately R6.1 million

Always make sure you understand your Effective Annual Cost (EAC). This will be shown on your statement or you can request it from your service provider. EAC is a standardised metric that was introduced by ASISA. All else being equal, a higher EAC would mean that less of your investment returns can be reinvested and potentially grow and compound over time.

At 10X, we keep our fees low, so that more of your money is invested for you. If you've got investments elsewhere, you can use our EAC calculator to compare service provider fees with 10X.

Or click below to get a free comparison report from our investment consultants, who are always available to give you the facts on your investments, at no cost to you.