Living annuity vs Life annuity in South Africa in 2023

by | May 23, 2022

Living annuity vs life annuity

The basics of Living annuities vs life annuities: Living annuity vs Life annuity in South Africa in 2023


A living annuity is a retirement product that offers you the opportunity to invest part of your pension fund. You, as the investor have full control over which investments you choose and how much risk your portfolio is exposed to. As an investor, you are able to adjust the income paid out each year allowing for sustainable growth while ensuring sufficient funds are available during your lifetime. For investors who may not have a need for income in their later years or wish to preserve capital for their beneficiaries, it is also possible to select a 100% preservation option upon death. This means their investment capital will remain invested and continue with their selected investment strategy throughout the term of their investment plan.

Living annuities

  • Investing in mutual funds
  • Withdrawals are flexible
  • Increasing your income when markets are up, or decreasing it when they’re down
  • You choose the investment strategy, risk level and term.
Living annuity vs life annuity

living annuity South Africa calculator


What is the living annuity South Africa calculator?

Living annuity calculator

A living annuity calculator is a tool that allows you to estimate the value of your annuity payments. The formula used to calculate an annuity is:

  • PV = PMT * (1 + r/n) ^ n * n, where r is the interest rate on your investment and n is the number of years it takes for you to receive all of your money back.

The living annuity calculator will only give you an estimate based on information about yourself, including:

  • Age: How long do you want to live? If this is unknown, we suggest setting it at 80 years old so as not to alarm yourself with an unrealistic number.
  • Current annual salary: How much money do you make annually?
  • Interest rate: What are current interest rates in South Africa?

The results tell us how many months (or years) until we can retire without having any other income sources available! If we have enough saved up by then (and stay healthy), then great! But if not…we may have some tough decisions ahead of us! Wealth Assist would be able to give you the best investment solutions in South Africa and the right advice for fixed property investment returns.

Living Annuity Calculator

This calculator provides you with a quick estimate of your living annuity payments. To use the calculator, simply enter your monthly income into the first box and then click ‘Calculate’.

A living annuity is a contract that pays out an income for life or for a set number of years. It is an alternative to receiving regular payments until death and can provide certainty in your finances.

How much should I invest?

When considering how much you should invest in order to achieve your retirement goal, there are a number of factors to consider. These include:

  • What kind of retirement do you want? Do you intend to continue working after retirement, or would you rather start a new career at this stage in life?
  • How long will it take for your investments to grow sufficiently? There’s no point putting money aside for 40 years if it will take 50 years for them to reach their target amount.
  • How volatile is the market going to be during this time period? If your portfolio gets hit by big losses, it might take longer for your portfolio to grow again and reach its target size than if there had been modest returns over the same period.

You can use this living annuity calculator to see what returns you could get from your pension fund or provident fund

You can use this living annuity calculator to see what returns you could get from your pension fund or provident fund.

No obligation to use the service

You are not required to provide personal information, no contact information is required, no credit card details required, no passwords required and no logins are required.

The service is free and open to the public.

Cash value life insurance

  • Cash value life insurance is a type of life insurance that offers the option to invest in various funds.
  • You may withdraw or borrow money from the policy.
  • You could use the policy to supplement your income.
  • Choose to take a lump sum payout or monthly income when you reach retirement age.

The drawbacks of living annuities

There are a few drawbacks to living annuities. The first is the high fees associated with many of these products, which can range from 1% to 5% of your initial investment. There are also some complex options out there, so it’s important that you do your homework before investing in one of these life insurance products.

Finally, living annuities are not liquid and can be difficult to manage as an investment strategy over time—if you decide after just a few years that you want out of the product (or if something happens and the insurance company has to pay out), then it may be difficult for you sell it for cash at an acceptable rate without taking on more risk than necessary in order to get what’s left back into your hands quickly enough.

Life annuities

A life annuity is an insurance contract that pays you a fixed amount of money for the rest of your life. It is a way to get paid for living. There are three main types of annuities:

  • Guaranteed-for-life (GLF) — This means that if you die before receiving your payments, they’ll be paid to whomever you named as beneficiary until they die or until the end of their lives. If there’s no such person, then nothing will happen and all payments will stop immediately.
  • Income-guarantee — This guarantees that even if you die early, there will still be regular payments to go out as per schedule until either death or maturity date occurs for this type of policy contract (usually lasts between 10 and 20 years).
  • Level payment plan — With this type of policy, there are set amounts paid at regular intervals over time—say monthly—until either death or maturity date occurs (usually lasts between 10 and 20 years).
Life annuity

The difference between living and life annuities- and why it matters to debt-ridden homeowners

So what is the difference between living and life annuities? And why does it matter to debt-ridden homeowners?

The difference between the two is that while in a living annuity, you get monthly payments for life (or until you become eligible for a pension), in a life annuity, your lump sum investment is returned to you at death.

A big advantage of living annuities is their flexibility: if your circumstances change later on in life, there’s no need to worry about selling off an existing policy as they can be converted into another type of product. Another key factor is that unlike with term assurance policies – which only pay out once – you can withdraw funds from a living annuity if needed; however, this will affect its future payout rate so it might not always make sense to do so! Conversely speaking though – due to its security features – we would recommend those who are concerned about losing their home due financial difficulties contact Real Estate Assist now rather than later as leaving things until later could result negatively impacting their ability finding affordable housing options going forward.”

Why you might choose a life annuity

If you want to ensure you have a fixed income for the rest of your life, then a life annuity might be right for you. In this case, the insurance company pays you an agreed-upon amount each month until they die (and sometimes even after). This is a lump sum that is paid out when the policyholder reaches a certain age or dies.

Life annuities can also provide guaranteed lifetime payments to your spouse after your death. If there are any funds left over at the end of their lives, these go back into a pool that funds future policies. The downside here is that if there aren’t enough people dying to cover all those who are still alive and collecting benefits, then it could lead to insolvency issues among insurers down the line – something called “adverse selection.”

Finally, some people choose life annuities purely because they don’t want their money running out before they do – which would happen with other types of savings plans like 401(k)s or IRAs

Trusting the right financial advisor to help you decide which is best for you, takes the guesswork out of assessing your finances and how to plan for the future.

If you are considering a living annuity, but are unsure whether it is right for you, the best way to decide is by working with a financial advisor. A financial advisor can assess your current situation and help you to make an informed decision on how best to plan for the future.

It is important that you choose a reputable financial advisor who has experience dealing with these types of products. This will ensure that they have knowledge of how these products work and what they can do for you, as well as being able to offer advice based on their experience with other clients in similar situations.


The benefit of a living annuity is that you can have control over your retirement income. This is great because you don’t have to rely on the government to provide for you and you can choose how much money goes into your pocket each month. In addition, this type of pension is also tax free! You can use this calculator tool as an estimate for what kind of benefit you would get . We hope it helps with planning ahead!

The right option for you is going to depend entirely on how much control you want over how your savings are invested, and how much income needs to be drawn from those savings. If you have an advisor, they will be able to give you more information. Contact us for help to save your home from being taken from you by the banks or debt review companies, we can assist you!

Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal or property advice. We do not take responsibility for any actions taken based on the information provided in this blog. It is always recommended to seek professional advice for your specific legal or property needs. Contact us (Real Estate Assist) if you seek such advice and we will appoint a professional from our team to be of assistance.

Need immediate financial help?

Related Posts

Please Note: We are unable to provide assistance if you do not own a property. Real Estate Assist specializes in helping property owners who are experiencing challenges with their mortgage payments. If you own a property and require support with debt consolidation without going through the debt review process, our team is here to help you explore options to unlock the equity in your home for necessary family matters.

Financial Distress Solutions

Financial Distress Solutions

Financial Distress Solutions: Real Estate Assist's Holistic Approach to Property ChallengesUnderstanding Financial...

Selling Your Home?

Selling Your Home?

Selling Your Home? Slow Down and Profit More with Real Estate Assist!Are Quick Sales Hurting Your Bottom Line?The Real...

quick sale land

Need to offload land fast? We've got you! Our quick sale land service is here to aid in quick transactions. We get how...