Already retired or about to?

The iSelect Living Annuity provides investors with flexible income options during their retirement where investment returns are linked to the performance of the market.  It is ideal for individuals who would like to grow their post-retirement income with monies they’ve received from:

  • Pension funds
  • Provident funds
  • Retirement annuities
  • Preservation funds 

  • Life after work

    By investing in your life after retirement, you're investing in the quality and comfort of it – whether it be spending more time with family and friends, a few rounds on the golf course or travelling. If you want to live life to the full you need a plan to grow your capital, whilst at the same time enjoying a level of income that enables you to maintain your current standard of living.


    Preserve your retirement savings

    With today's medical advances people are living much longer. Therefore, it's important to make your savings last by resisting the temptation to splash out on anything other than producing more income. If you've saved for your retirement using an employer's fund, a preservation fund or a retirement annuity, you can make your savings work for you after retirement by investing in a living annuity like the Investec iSelect Living Annuity.


    Inflation beating returns

    With the cost of living increasing every year, your income after retirement needs to keep pace with inflation. The Investec iSelect Living Annuity is for investors who wish to preserve their capital and require dependable returns in excess of inflation.

    Most of our medium-term investors (if you're healthy and younger than 70) choose from options under this annuity such as the:

    • Investec Opportunity Fund
    • Investec Cautious Managed Fund
    • Investec Absolute Income Fund

    These funds also guard against the potential for capital loss when markets experience downward moves.

  • Flexible withdrawals

    The Investec iSelect Living Annuity allows investors to choose the level of income they require. This can be monthly, quarterly, bi-annually or annually, and can change from year to year. Current rules state that an annuitant may draw an annual income between 2.5% and 17.5% of the market value of his/her investment, but you need to carefully manage your income stream every year so that your capital has the ability to grow, further enhancing your retirement provision.

    The table below shows indicative initial annual income levels for guaranteed single life annuities, with a 5% escalation rate and no guaranteed term, for different ages.You should compare your current age to the table below. If your selected drawdown percentage is above that reflected in the table you are at risk of not having enough capital to support such a level of real income for life.

    It is important to note that the table is based on life annuity rates where the Insurer carries the full investment and longevity risk, in contrast to a linked annuity where you carry both of these risks in full. If you survive for a longer period than the average life expectancy on which these rates are based, you could also run out of capital. The income drawn from your linked annuity is not guaranteed and will be affected by the investment performance of the funds that you have elected to invest in.

    Age 55 60 65 70 75 80 85
    Male 5.5% 6.2% 7.3% 8.7% 10.7% 13.5% 17.5%
    Female 4.8% 5.4% 6.2% 7.3% 8.9% 11.2% 14.6%

  • A tax efficient investment

    The Investec iSelect Living Annuity allows you to grow your retirement savings in a tax efficient manner:

    • If you've saved for retirement using an employer's fund, preservation fund or
      retirement annuity, no tax is payable on proceeds from any of these funds used to
      purchase a living annuity.
    • Your living annuity capital has the opportunity to grow as there is no income or capital
      gains tax on growth within the policy.
    • Income from your living annuity will be included in your gross income for the year and taxed
      at your marginal rate.

  • Planning your estate

    Investec iSelect Living Annuity can also be used as a highly beneficial tool with which to take care of your estate:

    • Income received from the annuity is taxed in the hands of the beneficiary without the capital sum being taxed in the deceased's estate.
    • A new contract will be issued in the beneficiary's name and the beneficiary may continue receiving income from the annuity for the rest of his/her life.
    • The beneficiary may elect to receive the remainder of the annuity over five years known as an accelerated annuity. This will only be taxed in the hands of the beneficiary.
    • The beneficiary may commute the full benefit to cash if the annuity was purchased with the proceeds of a pension or provident fund. This amount may be subjected to income tax and estate duty payable on estates with a value of more than R3.5 million.
    • The beneficiary may commute one third of the capital if the annuity was purchased with proceeds of a retirement annuity. This amount may also be subjected to income tax and estate duty.