Living Annuities Unpacked: How to Feast, Flex, and Future-Proof Your Freedom

This is something that often gets shoved to the bottom of the to-do list, somewhere between “sort out that drawer full of old cables” and “finally understand how my pension works.”

We’re talking - living annuities.

You might think it’s NOT the sexiest topic in the world, right? 

BUT… when you are at the point of feasting off the assets you’ve created, you’re going to think it is very sexy indeed!

If you're anywhere near your Financial Freedom Number or shifting gears from wealth-building to wealth-feasting…

Knowing how to feast off your assets in a way that…

• Ensures you enjoy and actually spend the money you’ve stashed away; and 
• Do it in a way that ensures you don’t run out of moolah before you run out!

… is the most important thing you need to know. 

Why? 

Because how you feast off your assets matters just as much as how you built them.

To help us dig deep into this delicious topic, I invited back one of my favourite humans and financial rockstars, Nerina Visser.

A long-time friend of The Wealth Chef community, speaking partner, Director of ETFSA, and expert in retirement income planning.

What unfolded was an absolute feast of practical wisdom. 

Hell, our 20-something community manager said she found it fascinating, and she is a LONG way off feasting on her retirement investment.

So grab your notebook, and watch the recording of this Wealth Builder Club session on Feasting Off Your Retirement Investments

🎥 Watch the full video here, where Nerina breaks it all down in a way that’s empowering, easy to understand, and incredibly practical.

In it, we explore:

✅ What exactly a living annuity is
✅ Why it offers more freedom than a traditional pension
✅ How to manage drawdowns without running dry
✅ And how to use the bucket system to manage your feasting plan in a way that keeps your cash flowing and your assets growing (and gives you massive peace of mind).

Whether you’re already in the feasting phase or still building your freedom feast, this conversation is packed with real-life examples and juicy wisdom to guide your choices with confidence.

NOTE: The specific tax regime being covered in this video relates to South Africa, but the drawdown / feasting principles and the bucket system are universal

What is a Living Annuity and Why Should You Care?

A living annuity is a post-retirement investment product that allows you to draw an income from your retirement savings while the rest of the capital stays invested so it can keep growing, tax-free. 

Sounds dreamy, right?

The magic of a living annuity is its flexibility. 

Unlike a guaranteed (or life) annuity, which locks you into a fixed income for life with no ability to adapt, a living annuity allows you to:

• Adjust your drawdown rate annually (between 2.5% and 17.5% of your capital),
• Choose how often you receive income (monthly, quarterly, annually),
• Change your underlying investments,
• And crucially, choose your beneficiaries directly, without the payout needing to go through your estate or be delayed by trustees.
  

You’re in the driver’s seat.

Managing Tax in Your Feasting Phase

Here’s the clever bit: with a living annuity, you have the opportunity to strategically manage your tax liability in retirement.

You can reduce your drawdown percentage (and therefore taxable income) and supplement it with income from a discretionary pot – like a standard investment account – or a Tax Free Account like your ISA or TFSA - which might have a more favourable tax outcome.

Read this article on understanding the different types of investment accounts you have and when to use them 

This gives you options. The holy grail of freedom. 

The more pots you have (tax-deferred, tax-free, taxable), the more levers you get to pull to minimise tax and maximise lifestyle.

The Bucket System: The Smart Way to Feast

If you’ve been in my world for a while, you know I’m a fan of buckets.

Nerina introduced the bucket system as her preferred living annuity drawdown strategy, and I fully agree. 

It’s about dividing your capital into three pots:

1. The Income Bucket (low-volatility portfolio, 3–5 years of expenses in cash or fixed income type assets)
   
2. The Intermediate Bucket (balanced, moderate-volatility portfolio to be able to plan your drawdown)
   
3. The Growth Bucket (high-growth, long-term investments which give you the best long-term returns and keep your money working hard for you)
   
   

Each year, you waterfall funds down, growth to intermediate, intermediate to income, to replenish the buckets. This gives you:

• Certainty in the short-term,
• Stability in the medium-term,
• And growth in the long-term.

… and a whole lot of SWAN (Sleep Well At Night)

Fees: The Silent Killer

Another biggie we covered? 

Fees. 

They’re sneaky. 

And over time, they quietly devour your future income.

We heard from members paying more in fees than they were drawing themselves - ouch!

The good news? 

You can move your living annuity (and other retirement products) to a more cost-efficient provider without penalties. 

And What If You’re Still Working?

Here’s the juicy bit: You don’t have to stop working to “retire” into a living annuity. 

You can start drawing the minimum and keep the rest invested, growing, and tax-deferred.

That’s what Nerina has done herself. 

As she says, she’s 

“retired from her retirement savings” 

but not from life. 

I love that.

One More Thing: Don't Let the Language Box You In

"Retirement", "pension", "annuity"... these words are loaded with outdated assumptions.

This is about designing your freedom flow.

How you draw income, how you minimise tax, how you preserve wealth and lifestyle. 

And that planning should and can start well before 65.

Your Next Step

If you’re nearing, entering, or daydreaming about the “feasting off your assets” phase – I invite you to:

🧠 Revisit your financial freedom number
📦 Review your pot allocations
💸 Look at your current fee structures
🎥 Watch this video session with Nerina Visser and explore your annuity options with fresh eyes

This is about conscious choice, not default paths.

✨ And remember, you don’t have to walk this alone.

If you want to explore your freedom strategy, get clarity on your Enough Number, and surround yourself with others building their wealthy lives, come join us inside the Wealth Builder Club. 

It’s where the real conversations happen and where so many have found the support, structure, and tribe they’ve been craving.

👉 Join the Wealth Builder Club

With big feasting love
Ann x