Is there a way to access part of my annuity?

Q. A Moneyweb reader asks: I was retrenched in August 2015 and opted to take a third of the money to pay debts and invest the remaining money, which I get some percentage of monthly. I need to buy a property with some money left in my retirement annuity (RA). How can I access it? vested lump sum leads me to believe that your funds are invested in a living annuity. One can’t receive a regular monthly income from their RA.

If the funds are in an RA, you can only withdraw if your fund balance is less than R7 000; you emigrate or become disabled. Outside of these conditions, you have to wait until minimum age 55 before having any access.

The rules of pension, RA or preservation funds regulate that you can take up to one third of the funds in cash, but the other two thirds must be invested into a living/life annuity that’ll give you a monthly retirement income.

An involuntary retrenchment from your employer’s retirement fund may be treated as early retirement, thus evoking this rule.

I’ll assume it’s a living annuity. In a living annuity your income is generated from the point at which you retire. It allows you to adapt your income level and the frequency at which you receive it once a year. You can choose the underlying investments to match your risk level and when you die it’s transferred to your beneficiaries.

The purpose of a living annuity is to give you a sustainable income for many years; giving you withdrawal access would defeat that purpose. However, if your annuity’s value drops below R50 000, you may withdraw it as a taxable lump sum. Access to a lump sum withdrawal to buy a property is dependent on the current fund balance and prior decisions made. I recommend you contact a qualified financial advisor for guidance. – Moneyweb