The source of retirement savings and the rules that apply to that retirement fund determine your retirement options.

For non-vested benefits, you can:

• Take at most one-third in cash at retirement.
• Use the rest to purchase an annuity to pay you an income during retirement.

For vested benefits, you can:

• Take up to the full amount in cash at retirement.
• Use the amount you don't take in cash to purchase an annuity to pay you an income during retirement.

Your benefit statement will show your vested and non-vested benefits.

Any amount you take in cash at retirement will be taxed according to the retirement fund lump sum tax table, and your income from your chosen annuity will be taxed as ordinary income.

What to consider when choosing an annuity

You can select a combination of annuities or a combination of types of annuities as long as you use at least R165 000 for each one. There is no limit on the number of annuities that you can purchase. Therefore, you can choose a life and living annuity from different registered insurers.

When deciding on the type of annuity, you must consider how much flexibility and income certainty you need. Your risk appetite, health and other sources of income are also important factors.

Broadly speaking, there are two categories of annuities, each with its key features. A living annuity offers flexibility to decide how to invest your retirement savings and how much income you receive within certain limits.

A life annuity guarantees you an income for the rest of your life, and you don't make any investment decisions.

Get financial advice

Take charge and ensure you receive a monthly income to maintain the life you've become accustomed to well into retirement.

We recommend that you get in touch with your financial adviser to plan for your retirement together. South African retirement funds must also give their members access to retirement benefit counselling when they are close to retirement and at retirement.

Select the “Find an adviser” button below if you don't have a financial adviser or speak to our retirement benefit counsellors on 0860 546 533.