Retirement
Beyond retirement: A game-changing income strategy
Financial planning during retirement is an ongoing process. As part of that process, reviewing your retirement income source from time to time is necessary especially as you grow older.
Most importantly, you have to be sure that your income will support you throughout your lifetime.
If you’re invested in a living annuity, it has many wonderful advantages, but often as life unfolds and you move from one life stage to the next, those benefits may become less attractive, or income security may simply become more important.
Did you know that it is possible to switch from a living annuity to a life annuity during retirement if necessary?
Making the right decision about your income can shape your financial well-being throughout retirement and it’s important to discuss your needs for income flexibility vs certainty, capital growth and preservation of legacy with your financial planner.
Let’s take a look at the major differences between a living annuity and a life annuity…
Why consider a life annuity
A life annuity provides you with a guaranteed income for life, and you can even choose that it increases every year – either by a certain percentage, or in line with inflation. If you’re concerned about taking care of your loved ones, you can add options like a second life insured, who will continue receiving the income after you’ve passed away, or a guaranteed income term during which the income will continue to be paid, even if you pass away during this time.
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Life annuity vs Living annuity
Let’s take a look at the major differences between a living annuity and a life annuity.
RETIREMENT OPTIONS
Navigating your retirement choices
Glacier by Sanlam is uniquely positioned to offer retirement income solutions that cover various needs, like stability and certainty, but also growth, and provision for loved ones after your death.
FAQ
Frequently Asked Questions
Why should I consult an adviser?
At retirement, different people need different things. One specific solution may not meet all their needs and risk concerns. A registered financial adviser will help you navigate all the retirement income solutions on offer to craft a personalised solution for your unique needs and goals, to ensure an income for life during retirement.
An adviser will assist you in your decision-making process, and with the practical steps of finalising your retirement, saving you time and reducing stress during this critical transition.
What is the de minimis rule?
The de minimis rule applies when the full value of the retirement component plus two-thirds of the non-vested rights portion in the vested component is equal to or less than R165 000. In this case, the full value of the retirement component and the non-vested rights portion of the vested component may be taken as a taxable cash lump sum.
How will my annuity be taxed?
If you purchase a compulsory annuity (for example a living and/or life annuity) at retirement, the income paid from the annuity will be taxed at marginal tax rates according to the income tax tables.
How will my lump sum withdrawal by taxed?
The cash lump sum is taxed according to the retirement lump sum tax table. You will receive the lump sum net of tax.
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Please contact me to talk about a tailored solution for you, to ensure your financial resources will support you comfortably for all the years ahead.