PODCAST: A living annuity you cannot live on
Is a living annuity a good choice to include in your retirement plan and will it be sufficient when you retire?
One of our readers, who is 82 years old, wrote to us with an interesting question. About 25 years ago, he took out two living annuity policies which at the time seemed like a good idea.
He says they were never told they will never have access to it other than the measly monthly withdrawals of about R5 500.
Since retiring he and his wife lived off their savings which will be depleted by the middle of 2024 and, therefore, he asked to withdraw about R200 000 to cover their living expenses for the future as the R5 000 they receive now will not even cover their medical aid costs, never mind their accommodation and food.
Warren Wilkinson, franchise principal and financial adviser at Consult by Momentum, explains what a living annuity is and how it works.