Living Annuity

The Coronation Living Annuity provides a regular income upon retiring from your retirement fund (including retirement annuity, pension, provident or preservation funds).  While no tax is payable on any investment gains earned in the living annuity, any income withdrawn will be taxed according to the normal tax tables.

A suitable investment portfolio can be created from the Coronation range of unit trust funds. The moderate risk Coronation Capital Plus Fund and the lower risk Coronation Balanced Defensive Fund are optimised for retired investors, who need to balance their immediate income needs with the requirement to achieve long term growth.

Living annuity investors are currently not subject to Regulation 28 of the Pension Funds Act, which mean that there are no prescribed investment limitations as in the case of a Retirement Annuity investment. Current law requires a minimum annual income withdrawal of 2.5%, and a maximum of 17.5% of the value of the Living Annuity.

The Coronation Living Annuity is flexible, cost-effective and transparent. It is designed to allow you the flexibility to change your level of post-retirement income annually and/or switch between investment options as your circumstances change, without incurring any penalties. We do not charge initial fees or annual administration fees. The only fees payable are the annual management fees applicable to the underlying unit trust funds selected by the investor.

LIVING ANNUITY ADVANTAGES LIVING ANNUITY LIMITATIONS
  • Provides post-retirement income
  • Flexible to income needs
  • Unused capital is heritable
  • Tax efficient, no tax on interest or dividends earned, no CGT on disposals
  • No initial fees, exit penalties or admin fees
  • Income is not guaranteed for life. Investors need to ensure sustainability by managing income withdrawal rates in relation to investment returns earned. Investors requiring a guarantee should invest in an underwritten annuity rather than a living annuity.
  • Drawdown of between 2.5% and 17.5% required

INVESTMENT OPTIONS

You may select from a wide range of Coronation unit trust funds. To simplify the investment decision, we highlight the flagship funds:

We believe these funds are best suited to growing and maintaining retirement benefits over the long term for the majority of investors.

Minimum Investment Amount LUMP SUM R100 000
RECURRING Not applicable
ADDITIONAL Not applicable