Question:
At age 55 (25.08.2004) I withdrew my various retirement annuities and reinvested R332k odd (2/30) in a compulsory life annuity fund with yourselves which, as you know, on these figures, renders a paltry sum per month (now still >R 3 000 p.m.) on which to survive. In view of the state of the country and the economy as a whole, my last consultancy which I was lucky enough to find was with F.I.F.A. O.C. and ended in Sept 2013. I am now getting deeper in debt and the only "work" I can find is on the sales side which necessitates upfront working capital, of course. My question is whether I am I able to make a R50 000 withdrawal (which I assume would be taxable) from my life annuity? I of course realize that this would reduce the monthly income somewhat. Thanks P.S. As a matter of interest my record with Libife goes back some 50 years [Manufacturers life which was absorbed by Liblife].
Answer:
Chris, "Ourselves" is 10X Investments so it is unlikely you bought your compulsory annuity through us as we do not sell such products. However, with regard to your question, once you purchase a compulsory life annuity, your money is effectively gone. The reason is that you have used this money to purchase an insurance product, which will pay you a guaranteed amount, growing with inflation, for the remainder of your life, irrespective of how old you get and what financial markets do. You cannot undo this insurance arrangement and request some of your capital back.
