Please could you tell me the difference between a "Living Retirement Annuity" and a normal "Retirement Annuity" and what the benefits are?
Your comments would be much appreciated.
Answer:
A Living Retirement Annuity is an account where you can invest the two-thirds of your defined contribution pension into a wide range of local Unit Trusts. You can then elect to draw between 5% and 20% of the capital each year, paid as a monthly pension.
The benefits are that (assuming you have accumulated enough capital) the cash value would form part of your estate when you die. Assurance companies often keep the cash value of any un-used traditional RA's.
Also, on an annual basis you can monitor how your investments are doing and consider the luxury of increasing your monthly income.
An insurance company retirement annuity is not transparent. They would set how much you would receive each month and the investment mix would be unknown to you.
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