Living Annuity Calculator — South Africa
Model your living annuity drawdown rate and projected fund longevity.
Last updated: May 2026
Models how long your retirement lump sum lasts under different drawdown rates and investment return assumptions — critical for avoiding the risk of outliving your money.
Key inputs explained
- Starting fund
- The retirement lump sum invested into the living annuity.
- Annual drawdown %
- Percentage of fund balance withdrawn each year. Can be adjusted annually at policy anniversary.
- Investment return
- Expected return from the underlying investment portfolio (typically a balanced or growth fund).
SARS requires a drawdown of 2.5%–17.5% per year. A rate above 6–7% significantly increases the risk of depleting your capital in your lifetime, especially if you retire in your early 60s.
Frequently Asked Questions
A living annuity allows you to draw an income of between 2.5% and 17.5% of your fund value per year. The FSCA recommends drawdown rates below 6% to reduce the risk of depleting your fund before you die. Most financial advisers target 4%–5%.
Longevity risk is the risk of outliving your money. If you draw too much each year and your investment returns are poor, your fund can run out while you are still alive. A R3M fund at a 10% drawdown rate would be exhausted in around 14–18 years — a serious risk if you retire at 65 and live to 85.
A life (guaranteed) annuity pays you a fixed income for life regardless of how long you live — the risk is carried by the insurer. A living annuity invests your capital and you draw an income; the capital risk is yours. Living annuities offer flexibility and the ability to pass remaining capital to beneficiaries, but require careful management.
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