Question:
Dear Madam/ Sir If I 'bought' a fixed - inflation-linked - spousal annuity for say a million rand, would I be able to add a 2nd lump sum at a later stage ? Thank you for this site - very useful. Yours sincerely Ian Hunter
Answer:
Ian,
Thank you for the (positive) feedback. But the answer to your question is "no", you could not add the lump sum to your existing guaranteed annuity, you would have to buy a separate annuity. Your initial annuity would be priced at the time you bought it (based on age, life expectancies and prevailing interest rates) and all these factors change with time, so the effective 'annuity yield' or income you would get on the second lump sum would be different. Only if you owned a living annuity could you add the second (retirement fund ) lump sum to your existing annuity.
