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This site is for retail investors. We recommend that you seek independent financial advice to ensure our Funds are suitable for your investment needs. Please remember capital is at risk and past performance is not a guide to the future.

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A new approach to living annuities

Is your living annuity working for you?

A living annuity provides you with income during your retirement. The income is drawn from your retirement fund and the amount you choose to withdraw depends on a number of factors including; the amount you have saved at the point of retirement, your lifestyle and the length of your retirement.

Managing these factors, and the balance between growing your pension pot and selecting a percentage to draw as income to live off, can be a complicated decision. If the balance is wrong this can lead to the nightmare situation of pensioners running out of money.

So, how can you ensure a comfortable retirement without the stress of running out of money too soon? Investec Asset Management conducted research covering 117 years of investment data, introducing some new ways to approach this age-old problem.

Are you a financial advisor?

Visit our Living Annuities professional hub to find out more about our research

Visit the professional hub

In the news

Jaco van Tonder discusses the key issues surrounding retirement income

Read the latest article

Key questions to ask when defining your living annuity

Based on our research we've outlined some key questions to consider when reviewing your living annuity. We suggest that you discuss these questions with your financial advisor.

1. Have you saved enough?

The number one rule is to ensure you’re putting enough away to meet your future retirement needs, if you’re not yet in retirement then this is the safest way to avoid failure.

2. Do you have the right investment portfolio driving your retirement fund?

Whilst you need an income, you also need to ensure that your remaining pension savings grow to counter the impact of inflation and provide future income. The type of assets you’re invested in can be crucial. For example, our research showed the importance of growth assets, such as offshore equities, in providing returns for investors who required an above average percentage to be drawn as income.

3. Are you reviewing your income level in the right way?

Simply increasing your income level based on inflation may actually be detrimental to your living annuity success. Adjusting your income level based on your annuity’s investment portfolio performance in the previous year can significantly improve your retirement horizons.

4. Are your investments doing enough?

Providing growth to your investment portfolio is one thing, but what about managing risk? Our research showed that that the combined effect of outperformance and lower investment risk led to significantly better results for investors.

 

Finding this balance is the role that an active asset manager like Investec Asset Management could play.

Need advice?

There are many ways to invest your money, but everyone’s circumstances are different. To know what strategy will help you achieve your retirement goals, you can search for a financial advisor in your area

Find a licensed Financial Advisor

Investec living annuity

Find out more about the Investec Investment Linked Living Annuity and our range of Core funds. Follow our secure online process to invest now.


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Important information

Collective investment schemes (CIS) are traded at ruling prices and can engage in borrowing, up to 10% of portfolio net asset value to bridge insufficient liquidity, and scrip lending. A schedule of charges, fees and advisor fees is available on request from the Manager, Investec Fund Managers SA (RF) (Pty) Ltd which is registered under the CIS Control Act. Additional advisor fees may be paid and if so, are subject to the relevant FAIS disclosure requirements. CISs are generally medium to long-term investments and the manager gives no guarantee with respect to the capital or the return of the Fund. Performance shown is that of the Fund and individual investor performance may differ as a result of initial fees, actual investment date, date of any subsequent reinvestment and any dividend withholding tax and past performance is not necessarily a guide to the future. Performance figures above are based on lump sum investments, using NAV to NAV figures net of fees with gross income reinvested, in South African Rands. Different classes of units apply to the Fund and the information presented is for the most expensive class. Fund valuations and transaction cut-off time are 16h00 SA time each business day. This portfolio may be closed in order to be managed in accordance with the mandate. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. A higher Total Expense Ratio (TER) does not necessarily imply a poor return, nor does a low TER imply a good return. Where portfolios invest in the participatory interests of foreign collective investment schemes, these may levy additional charges which are included in the relevant TER. The ratio does not include transaction costs. The current TER cannot be regarded as an indication of the future TERs. Fund prices are published each business day in selected media. Additional information on the Fund may be obtained, free of charge, atwww.investecassetmanagement.com. The Manager, PO Box 1655, Cape Town, 8000, Tel: 0860 500 100.Investec Asset Management (Pty) Ltd (Investec) is a member of the Association for Savings and Investment SA (ASISA). The scheme trustee is FirstRand Bank Limited, PO Box 7713, Johannesburg, 2000,Tel: (011) 282 1808. All information provided is product related, and is not intended to address the circumstances of any Financial Service Provider’s (FSP) clients. In terms of the Financial Advisory and Intermediary Services Act, FSPs should not provide advice to investors without appropriate risk analysis and after a thorough examination of a particular client’s financial situation.

Investec Asset Management (Pty) Limited and Investec Investment Management Services are authorised financial services providers.