Living annuity planning: How 10X’s transparency and simplicity reduce retirement stress

Building blocks to a lasting Living Annuity

Our panel of experts discusses living annuities, sustainable drawdown rates, offshore investing, and everything else one might need to consider to ensure a comfortable retirement. Read more

The retirement years should be a time for relaxation, doing things that you wish to do and not worrying about your living annuity. The stress experienced by retirees during retirement is often due to factors such as unclear fee structures, poor asset allocation and complexity when it comes to their living annuity.

Your annuity needs to be carefully structured to harness the potential benefits. The emphasis needs to be on transparency, simplicity, appropriate asset allocation and cost-effectiveness. This ties in well with 10X’s ethos, which focuses on transparent and low-cost fees, simplicity, consistency and diversification.

In this article, we will illustrate how 10X’s approach to investing can help to reduce retirees’ stress when it comes to living annuities. Focusing on transparency and keeping things simple can help reduce the anxiety that can come with finances.

Understanding living annuities

A living annuity is a long-term flexible investment product that allows you to both invest your capital while drawing an income at the same time. They offer flexibility, allowing you to choose a fund to invest in according to your investor profile and long-term financial plan.

You may also select your drawdown rate each year. This will be a drawdown rate of between 2.5% and 17.5% per annum. A sustainable drawdown rate is generally thought to be around 4% by experts. This can be an important factor in the sustainability of your annuity.

Additionally, the payment frequency may also be selected from annually, biannually, quarterly or monthly, depending on your preference.

The problem: Why living annuities create stress for so many retirees

Complex fee structures

Complex fee structures can cause confusion and anxiety. There can be a variety of different fees levied on a living annuity, and sometimes retirees aren’t aware of the fees that they are paying or how these fees may impact their annuity over time. Hidden costs can take people by surprise and leave them less than satisfied. Over time, small charges can compound and significantly erode the value of a retiree’s income. Many retirees also struggle to compare providers when fees are presented inconsistently, which only adds to the uncertainty.

Confusing investment strategies

Retirees may be presented with too many fund options and not necessarily possess the knowledge and know-how required in order to choose the right fund for their long-term retirement objectives and investor profile. The jargon used in investment materials can make the process feel overwhelming, leaving many unsure about whether they’re making the best decisions. Without the right resources, some retirees may end up questioning whether they’re making the right choices.

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Administrative complexity

Complexity, when it comes to administration, can result in frustration. There are often a number of administrative tasks and processes that a retiree may need to embark on. This can range from onboarding as a new investor to making changes to your living annuity over time via forms or an online platform to accessing statements and similar. If these processes are not streamlined or easy to understand, a simple request can become time-consuming and stressful. Many retirees prefer minimal paperwork, clear instructions and a strong support team to assist.

Psychological stress

Psychological stress around areas such as your annuity’s longevity and the fear of your it running out too soon, or the fear of market crashes and losing money, can be very real. Retirees often carry the burden of feeling solely responsible for making sure their savings last, which can create constant worry. In periods of market volatility, this stress can be even more prevalent.

These are all areas where 10X can help with our simple, clear and transparent ethos which filters through to all areas of our processes, procedures, fund options and strategies.

The 10X advantage: Transparency that retirees can understand and trust

One clear fee, no hidden layers

At 10X, we keep our fee structure simple, clear and easy for all to understand. You can expect complete transparency and no hidden fees. Typical fees charged are usually less than 1% for most retirement products. Please explore our product page for the most up-to-date fee information. Fee information is correct as of the 25th of November 2025.

Our straightforward approach allows retirees to plan with confidence, knowing exactly what they are paying for. It also removes the guesswork that often leads to fee-related surprises with more complex providers.

Predictable, evidence-based investment strategy

We make use of an index-tracking investment strategy at 10X, which includes a more active approach to asset allocation. This may also be more cost-effective due to the reduced number of activities associated. By following this evidence-based approach, retirees benefit from a strategy that avoids emotional decision-making and market timing. This can create a more stable and consistent investment experience.

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Straightforward drawdown rate change process

Our drawdown rate change process is easy and clear to do. Changes to your drawdown rate may be made annually at the policy anniversary date. This is the date of your policy’s inception. This predictable annual cycle helps retirees plan income needs in advance and reduces the stress of navigating complicated change requests.

Transparent reporting

All statements and reports are clear and easy to understand. These statements and reports are easily accessible from our online platform or via our helpful and responsive investment consultants. Retirees can easily and quickly track progress without the need to decode complex charts or financial terminology. With constant access to clear reporting, retirees can have greater peace of mind and make informed investment decisions.

The 10X living annuity investment strategy

Globally diversified index-tracking portfolios

At 10X, you can expect a variety of well-diversified funds that include a mix of both local and offshore assets. A diversified portfolio means that you may take advantage of the different economic cycles. A living annuity is not subject to Regulation 28 of The Pension Funds Act, which means you may invest 100% offshore, as long as your provider is offering this.

Investing offshore may offer a hedge against any local market volatility and depreciation of the Rand. It also opens the door to industries and opportunities not readily available in the South African market, such as global tech, healthcare and consumer sectors.

Please visit our funds page for the most up-to-date fund information.

Why index tracking matters in retirement

As mentioned earlier, index tracking may be a more cost-effective investment strategy. As there are fewer costs involved, you may see fewer costs for you as the investor. Index tracking is when the makeup of a benchmark index is tracked and mimicked with the aim of generating the same returns as this index.

For this reason, there may be fewer activities like research, analysis and trading involved, which may result in lower costs. The results may also be more consistent over time, as the focus is not on outperformance. Consistency can be especially important in retirement, where preserving capital and generating predictable income may take priority over chasing high but volatile returns.

Active management is when a fund manager actively seeks the best stocks. This would involve research, analysis and buying and selling, which could result in higher costs. These additional expenses are often reflected in higher fees being charged to you, the investor. Active management can also introduce additional risk if the manager’s decisions don’t perform as expected, which can be particularly stressful for retirees.

The S&P Indices Versus Active (SPIVA) Scorecards track the performance of actively managed funds against their benchmarks globally, and suggest that index tracking may outperform active management most of the time. According to the latest SPIVA South Africa Scorecard (as of 31 December 2024), 60.84% of South African actively managed equity funds underperformed the S&P South Africa DSW Capped Index over the ten-year period ending 31 December 2024.

We can see the potential advantages of an index-tracking investment approach, especially for long-term retirement planning where minimising fees and maintaining stable returns are essential.

Asset allocation

10X offers access to a mix of different asset classes via a range of carefully selected funds. Asset allocation plays the biggest role in the performance of your annuity, accounting for over 90% of returns, as seminal research from Brinson, Singer and Beebower shows. As an investor, you would look to diversify across the asset classes. Namely: equities, real estate, bonds and cash.

Equities are generally the most volatile of the asset classes, but they are also likely to generate the best returns in the long term. As data suggests, equities have historically produced returns above inflation by around 7% annually - over the long term (based on JSE All Share Index performance versus CPI from 1960-2020), but past performance does not guarantee future results.

Additionally, real estate may provide a good hedge against inflation and also produce solid returns, while bonds are more stable, but they may generate some lower returns. This is not to say that bonds never outperform, merely that they are typically seen as a more conservative option. Cash is the most stable of the asset classes, but it will likely produce the lowest returns of all. Generally, you should look to select your asset allocation according to your investor profile and your long-term financial plan.

Low fees = Higher longevity

Lower fees may mean that you have more returns available to reinvest. These returns can then potentially grow and compound over the long term, resulting in better growth and the sustainability of your living annuity. Understanding your fees as a Rand value, rather than a percentage, can help properly illustrate the profound impact these fees have. This is often the biggest single cost that a retiree has to deal with. There are some common fees that you may expect to see. These fees are:

Administration fees: These are the fees charged for the tasks related to the administration of the fund. For example, tax, compliance and reporting

Management fees: These are the fees charged for the running and management of the fund.

Advisor fees: Advisors will charge fees for their services and advice. They may charge both an initial and an annual fee.

Let’s look at an example which will help illustrate the effect that fees can have: We will assume the following for this example:

• Investment amount: R2 million
• Investment period of 25 years
• Drawdown rate: 4% (assuming an annual payment)
• Return of 12% per annum
• An inflation rate of 6%

Example 1 (0.86% Fees): Real investment value is approximately R2.36 million.

Example 2 (3% Fees): Real investment value is approximately R1.45 million.

What may seem like a small difference in fees can have a significant impact on the potential growth of your living annuity over the long term. This example is for illustrative purposes only, and actual results may vary. You can learn more about fees here.

How 10X Makes Drawdown Planning Easy and Stress-Free

Emphasising simple, sustainable drawdowns

10X emphasises the importance of a sustainable drawdown rate and the bearing that this has on the longevity of your living annuity. As mentioned, a drawdown rate of 4% is generally thought to be sustainable. A wealth of free online resources is available on the 10X website, including tools and calculators that are available to assist investors with the decision-making process. This useful living annuity calculator provided by 10X allows you to toggle between a variety of different drawdown rates in order to see the impact of this on the longevity of your annuity.

Diversification reduces risk

Diversifying across the various asset classes has the effect of spreading your risk and potentially reducing the impact of market volatility. If one particular asset class experiences a downturn, your investments in other asset classes may be less affected, which helps protect the overall value of your portfolio. This approach helps smooth returns over time and reduce the likelihood of large losses that could threaten the longevity of your living annuity.

The same principle applies to investing offshore versus investing in the local South African market, as exposure to multiple markets can provide a hedge against local economic or currency fluctuations.

10X’s administrative simplicity

As a new retiree, a clear and easy onboarding process which ensures little frustration is vital. Simple and easy-to-understand forms, which then result in a seamless process, leave retirees feeling satisfied. At 10X, we believe in a straightforward investment approach, and our onboarding process is no different.

Additionally, when you are viewing your statements and your living annuity’s performance, complicated graphs and jargon may not be helpful. 10X provides statements that allow retirees to clearly see the progress and performance of their living annuity over time, leaving no place for confusion.

We also make it easy for you to make any changes to your living annuity easily, whether that’s to do with fund selection, drawdown rate or income frequency. 10X also offers easy access to investment consultants. Our consultants are experienced, skilled, knowledgeable and eager to answer any queries you may have.

Your 10X living annuity planning checklist

Here is a handy checklist to help you with your living annuity planning:

Are your fees low and transparent?

It’s important to review your fees annually. You would also want to check the Effective Annual Cost (EAC) of your living annuity. This is the total fees and costs of owning your living annuity over a one-year period of time. Your EAC should be available on your statement or directly from your service provider. You can use our EAC calculator to compare our fees with different service providers.

Do you understand your fund selection?

It’s important to understand the underlying funds that you are invested in. Within this fund, there may be a mix of different asset classes. Being familiar with your fund’s objectives, risk profile and historical performance helps keep your investments aligned with your retirement goals.

Is your asset allocation diversified - including offshore exposure?

Diversifying is key to managing risk and improving long-term outcomes. Does your asset allocation include a mix of asset classes, and some offshore investments? Diversifying locally and internationally can protect your portfolio from currency fluctuations and local economic downturns, while presenting you with global market opportunities.

Do you have a clear drawdown strategy?

You want to ensure that your drawdown rate is sustainable and that you aren’t drawing too much, which may then impact the longevity of your living annuity. A clear drawdown strategy can help you maintain a steady income without jeopardising your capital.

Final thoughts on living annuity planning

Retirement should be a time to relax and enjoy your golden years without needing to spend time worrying about financial matters. These financial worries can stem from areas such as high fees and hidden costs, uncertainty around your living annuity, lack of support and decision-making fatigue.

10X’s modern and simple approach reduces all of this with our clear reports, low and transparent fees, supportive investment consultants and easy administration processes. Our 10X living annuity is designed to make life easier for our retirees, allowing you more time to focus on enjoying your retirement. Secure your future and get in touch with 10X today!