Best way to invest savings

Considering a living annuity and lump sum investment combination.

- Nelis Brink

As I am to retire in about three years, I would like to know whether the following "strategy," will be the best for my R5.2 million provident fund and Rgoo ooo retirement annuity from the same company: 1. Buying an inflation-linked five-year guaranteed single-life annuity with the R5.2 million; and 2. Taking R5oo ooo as a lump sum and using R4oo ooo to buy a living annuity at the lowest drawdown of 2.5%.

I do not have a spouse, and my children are grown-ups, living independently.

Dear reader, Given your situation, where you have R5.2 million in a provident fund and R900 000 in a retirement annuity, it's commendable that you,re considering a structured approach to generating post-retirement income.

However, instead of locking up most of your funds in an inflation-linked guaranteed annuity, I suggest considering a living annuity and lump sum investment combination. This strategy can offer you greater flexibility, growth potential, and access to capital over the long term.

Why a combination?

1. Flexibility and control over investments. A living annuity provides you with control over both your income and your investment choices.