Members of an employer’s pension or provident fund are allowed to postpone their retirement, even though they have reached the normal retirement age of the fund. Why would you want to defer your retirement? You could have a part-time job or contract work lined up for a few years, with the result that you won’t have to use your retirement funds, or you might not have accumulated enough money and have to save for longer in order to retire comfortably at a later age.
Once you do decide to start drawing an income from your retirement savings, you have two options: invest in a living annuity or buy a life annuity.
It is important to note that you can move your funds from a living annuity to a life annuity, but not the other way around, so once you’re in a life annuity, you cannot change your mind.
A living annuity gives you flexibility with regard to the income you can pay yourself. You have to choose a drawdown of between 2.5percent and 17.5percent a year, and most clients choose to be paid this income monthly.