What percentage of my annuity can I withdraw per month?


Question:

What percentage of my retirement annuity can I withdraw per month?

Answer:

Steele,

You can only access your retirement annuity once you tun 55. You are then compelled to use two-thirds of the retirement annuity to buy an annuity (unless the retirement annuity value is below R75 000). The annuity you buy can either be a living annuity or a conventional annuity. The pay-out on the conventional annuity is out of your hands - it depends on the price and type of annuity you buy. Once you buy this annuity you are locked in. For a living annuity, you choose the draw-down rate annually - this must be between 2.5% and 17.5% pa (which you can spread over 12 months). Your draw-down rate should be quite conservative (around 4-5% pa, assuming your fees are below 1% pa), if your money has to last for a long time (20 years plus).

The information and answers supplied in this section do not constitute advice as defined by the Financial Advisory and Intermediary Services Act, 37 of 2002.


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