Your retirement savings may be locked in, but how you draw income from those savings is entirely up to you.
If you’ve retired or are planning to soon, you’ve likely come across the term Living Annuity. It’s a flexible way to draw income from your retirement capital — but flexibility comes with responsibility.
So how do you know if you’re drawing too much?
This is where the Living Annuity Calculator comes in.
A Living Annuity allows you to transfer your retirement savings (from an RA, Preservation Fund, Pension or Provident Fund) into an investment product that lets you:
• Choose your drawdown rate (between 2.5% and 17.5%)
• Invest in a mix of unit trusts aligned to your risk profile
• Retain ownership of the capital, with the option to leave a legacy
But here’s the catch:
Drawdown too much or invest too conservatively, and your money might not last.
The Living Annuity Calculator helps you see how long your savings could last at different income levels and return scenarios.
You enter:
• Your current age
• Your Living Annuity balance
• Your monthly income goal in today’s money
• Your drawdown rate (or let the calculator help you test one)
• Your expected return model (Aggressive, Moderate or Conservative)
• Whether you want your income to grow over time (annual increases)
You’ll then see:
• How long your capital is projected to last
• At what age shortfalls may occur
• The trade-off between higher income now vs. long-term sustainability
General planning guidelines suggest:
• 4–5% drawdown is usually sustainable for 30+ years
• 6–8% can work for shorter timeframes or strong returns
• 10%+ is usually risky and may deplete capital quickly
Calculators helps visualise this impact, so you can adjust accordingly.
If the results show your capital may not last, you can explore:
• Lowering your income or reducing annual increases
• Reviewing your investment mix for better return potential
• Adding a guaranteed income component to supplement the annuity
• Delaying drawdown if you’re still earning other income
Even small changes to assumptions can lead to big improvements over time.
Living Annuities are powerful, but they aren’t “set and forget.” They require regular monitoring and thoughtful planning. The calculator gives you visibility to manage this well.
Use the Living Annuity Calculator to test your strategy, identify gaps and draw income with greater clarity and confidence.
