Absa Living Annuity

Absa Living Annuity, How It Works & Initial Investment Amount

In our guide today, we will briefly discuss the Absa living annuity in South Africa.

During retirement, the main challenge is usually how you can make your capital last as long as possible.

Therefore you need an appropriate investment income product to help you balance the need for reliable income and continuous growth of your invested capital.

The Absa living annuity has got you covered for all your retirement needs.

We will first show you the features of the living annuity.

Absa Living Annuity

This retirement account allows customers to withdraw funds at a predetermined rate during retirement.

You need to consider your consumption rate, level of returns, and the rise in living costs when determining how long the funds in your account will last. 

The account provides you with a flexible investment vehicle to receive regular and adjustable retirement income.

You can adjust your income drawdown annually according to your needs without penalties.

With this account, your capital continues to work for you during retirement.

You choose the withdrawal type, but the most favorable withdrawal is monthly.

You get to choose the portfolio and income requirements that suit your needs.

These are the features of the Absa living annuity in South Africa.

What Is The Cost

The minimum lump sum investment for this account is R50 000.

You are not charged any initial policy fees.

The annual policy charge for the first R250 000 is 0.75%, and the next R500 000 investment is charged 0.50%.

For investments above R750 000, the annual policy charges are 0.25%.

This is the cost of investing with the Living annuity in South Africa.

What Are The Tax Implications

The tax on this account is charged depending on the payments received.

The annuity you received will be taxed as income, and PAYE is deducted at the source about the SARS tax tables.

A tax directive should be obtained annually from SARS if an investor requires a lower tax percentage deduction from the annuity payment.

Income or capital growth in respect to the underlying assets of the living annuity in the hands of Absa Life will not be taxed.

That is the tax implications of the Absa living annuity in South Africa.

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