Retire: What would you do?

Carina Jooste Latest, Retire

The difficulty with retirement planning is that there’s no one-size-fits-all solution that you can buy and store until you hit retirement. Over the past three months, three retirees have spoken about their retirement decisions. Each individual’s retirement story is as unique as their relationship with money, the decisions they’ve made, and past and present circumstances.

We’ve compiled the different investment choices our three retirees made when they started their retirement

Living vs Guarranteed annuities

Rodney (read the full post here)

Rodney used 60% of his retirement savings to purchase a guaranteed annuity, and 40% went to the purchase of a living annuity. The guaranteed annuity includes a 4% yearly inflation increase, guaranteed  for 15 years. His guaranteed annuity covers his monthly expenses, and gives him the peace of mind he needs.

“The last few years have shown that you could lose all your gains in the market due to poor local and global political decisions. So I felt that I couldn’t fully depend on the money invested in a living annuity.”

Even with this 60 – 40 split, he has concerns: “The living annuity is what worries me the most, and that’s why I will most likely convert to a guaranteed annuity. Also, I think when we hit our 70’s and 80’s, we can’t be sure of our mental capacity. That’s not the time to have issues with a living annuity! Also, a guaranteed annuity pays me more for the same amount, than the living annuity at a 4% drawdown rate. I calculated that after 15 years, the guaranteed annuity payback would more than cover the amount I paid for it.”

Gert (read the full post here)

When Gert had to choose between a living or guaranteed annuity, he opted for a living annuity. “Choosing a living annuity enables me to manage my own destiny. Moreover, the amount that my wife and I could get from a guaranteed annuity would have been insufficient to start with and would have required us to work again to provide another source of income.”

In his case, growing his investments is a priority. “Retiring at 63, with a father who’s turning 96 this year, I was forced to consider the possibility that if I get that old, I will run out of funds. So I invested in five different funds with varying degrees of risk.”

Although he was debt-free when he retired, Gert still opted to cash out a portion of his savings to purchase an apartment. This he rents out to generate a bit of income. He also took up beekeeping as a hobby, and this brings in some spending money as well.

“We’ve only been retired for three years, but with my hobby and the flat bringing in some income, we’ve been able to keep our withdrawal rate on my living annuity low enough that it has actually grown quite reasonably”

Re-tired (read the full post here)

Re-tired’s reasoning was slightly different “On retirement I withdrew as much as I could of the one-third lump sum that can be taken in cash, before tax became an issue. This I invested in discretionary stocks. I then bought a living annuity with 10x – they offer very simple and low-cost investment options.”

His concern was the tax implications of his investment decisions post-retirement. In retirement, a living annuity is just a salary with very few ways of off-setting tax, while withdrawals from his discretionary investments benefitted from reduced taxation as they’re deemed capital gains.


Each retiree had different concerns driving their decisions, but knowledge of different options and implications was essential for all of them. That’s why it’s so important that we talk about money. By sharing our insights, we can help others broaden their views, gain insights of their own and apply that information to shape their own retirement narrative.

“No one prepares you for the ‘hundreds’ of options you are met with when you retire – it’s complicated!”

Retire blog

Saving for retirement is the biggest investment most of us will ever make. Sadly, it can also be very complicated. In this monthly blog, Carina Jooste responds to common retirement questions, ranging from which products are best suited to different circumstances to efficient tax treatments.

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