How to invest R2m

You can’t, but here are strategies that could work better.

- Nelis Brink

Question: I currently have a living annuity. In addition to my living annuity income, I also receive dividends from other investments. I want to investF R2 million in a retirement/living annuity and top it up three or four times per year when I receive dividends. Is it possible to top up with an unspecified amount?

The answer: Living annuities offer flexibility and control over post-retirement income, but they have specific rules regarding contributions and structure. Here's an overview:

1. Living annuities: contributions and topping up

Living annuities are retirement income vehicles designed to provide flexibility in managing post-retirement investments and withdrawals. However, once they are set up, they do not allow for ad hoc or multiple contributions.

Initial investment: When you purchase a living annuity, it must be funded with a lump sum from your retirement savings (pension, provident fund, or retirement annuity) at retirement. Once the annuity is in place, you cannot add additional amounts.

New living annuity for additional contributions: If you want to invest additional funds (your dividends), you must purchase a separate living annuity. SA regulations do not allow multiple top-ups to an existing one.

2. Alternative options for topping up