Living annuity drawdown calculator
Your details
Monthly income after tax (estimate)
R12 500.00
R12 500.00 a month before tax at 5%
- Yearly income before tax
- R150 000.00
- Tax on the annuity for the year
- R0.00
- Lowest allowed (2.5%)
- R75 000.00
- Highest allowed (17.5%)
- R525 000.00
How we worked it out
- Value of the living annuityR3 000 000.00
- Drawdown rate5%
Allowed range 2.5% to 17.5% (GN 290 of 2009)
- Yearly income before taxR150 000.00
- Other taxable incomeR0.00
- Tax on other income onlyR0.00
- Tax on other income plus the annuityR0.00
- Tax on the annuity incomeR0.00
The difference between the two, using the 2026/27 tables and your age rebates
- Monthly income before taxR12 500.00
- Monthly income after tax (estimate)R12 500.00
- You can change the rate only on the anniversary date of the contract. The income is not guaranteed: it depends on how the investments perform.
Add your own assumed return and income increase to see an illustration of how long the income can keep up.
Minimum and maximum income
On each anniversary date your provider works out the minimum (2.5%) and maximum (17.5%) income from the new fund value. If the fund has shrunk, so has the maximum you may draw.
More on the rules
Read living annuity rules for the anniversary date, the R150 000 commutation rule and how much you must annuitise at retirement.
Frequently asked questions
What drawdown rates are allowed?
Between 2.5% and 17.5% of the value of the investments each year, for living annuities started on or after 21 February 2007 (Notice 290 of 2009). Older contracts use 5% to 20% unless the annuitant moved to the new limits.
When can I change my drawdown rate?
Only once a year, on the anniversary date of the contract, when the fund value is recalculated. You cannot change it at any other time.
How is living annuity income taxed?
It is added to your other income and taxed on the normal 2026/27 tables, after the age rebates. For example, at 66 with no other income, 5% of R3 000 000 (R150 000 a year) is below the tax threshold, so no tax is due. 6% of R6 000 000 (R360 000) costs about R46 407 a year in tax.
Can I cash in a small living annuity?
Yes, if its value is less than R150 000 (from 1 March 2026; it was R125 000). The lump sum is taxed on the retirement lump sum table.
Is the income guaranteed?
No. A living annuity pays a percentage of a fund that goes up and down with the investments. If returns are low or you draw a high rate for long, the rand income can fall.
Which drawdown rate should I choose?
We can't advise you on that. It depends on your other income, health, investments and needs. An authorised financial adviser or your provider can help you decide.