Estate Living Magazine #liveyourbestlife - Issue 46 December 2019 | 页面 28

P R O P E R T Y
&
I N V E S T M E N T
CHOOSING BETWEEN A
LIFE
ANNUITY
LIVING
ANNUITY
AND A
It’s not an easy decision and thankfully not limited to just one or
the other. You can take out both types of annuities concurrently
or purchase a composite annuity (both living and guaranteed)
under a single life assurance policy, which is a bit of a hybrid
product.
Irrespective of other investments, if you are a member of a
retirement fund (pension, provident, preservation or retirement
annuity), you must use at least two-thirds of your fund proceeds
to purchase an annuity at retirement. This annuity will provide
you with a regular income (or pension) for the rest of your life. 
A guaranteed annuity or life annuity
The guaranteed annuity is an insurance product that you
purchase from a life assurance company. The life assurer
When reaching retirement,
we’ll almost all be faced
with the choice of taking
either a guaranteed annuity
(also known as a life
annuity) or a living annuity.
guarantees to pay you a specified monthly pension for the rest of
your life, which effectively insures you against the risks of living
longer than expected, as well as the risk of using up your money
too soon.
On retirement, you would purchase the annuity by paying a
lump sum in exchange for the guaranteed monthly income,
which would normally include an annual increase.
Several factors to consider when determining your monthly
pension include:
1. Your age – the younger you are, the longer you are likely to
live, which results in a lower monthly payout.
2. Your gender – women have a higher life expectancy than
men and generally receive a lower pension.