Many South Africans have effectively been gambling with their life savings by choosing to draw a pension from a living annuity with no longevity protection and without being rewarded for the higher risk involved. Actuary Bjorn Ladewig, from retirement product provider Just, says this is because living annuities have generally underperformed with-profit guaranteed annuities since 2006. The company's recent survey, Just Retirement Insights, shows that 89% of retirees want a lifetime-guaranteed income. Yet, according to the Association for Savings and Investment SA (Asisa), 92% of retirement money is invested in living annuities. There is renewed interest in traditional guaranteed life annuities as the retirement industry scratches its head to solve the crisis that results in fewer than one in 10 South African retirees receiving a sustainable income in their golden years.

Living annuities are popular because they provide retirees a sense of ownership and control, says Warren Matt...

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