PSG Wealth Living Annuity Review 2026: Retirement Income Explained
When you retire, your accumulated retirement savings must provide an income — and one of the two main ways to do that is a living annuity, which keeps your money invested and lets you draw an income you control. The PSG Wealth equity-linked living annuity is one such product, letting you invest your retirement lump sum across a wide range of funds and draw an annual income of between 2.5% and 17.5% of the value. This 2026 review explains how it works, the crucial decision that determines whether your money lasts, and who a living annuity suits, with the important note that this is a significant retirement decision best made with advice.
What a living annuity is — and how it differs from a life annuity
At retirement you generally choose between two annuity types, and understanding the difference is essential. A life annuity (guaranteed annuity) pays you a guaranteed income for life, set by the insurer — you can't outlive it, but you give up control of the capital and it typically dies with you (unless you add guarantees). A living annuity, like this PSG product, keeps your capital invested in funds you choose and lets you draw an income you control within regulated limits — you keep flexibility and any remaining capital passes to your beneficiaries, but you carry the investment and longevity risk: draw too much or earn too little, and your money can run out. This PSG living annuity is the second type: more control and upside, but you bear the risk of making it last.
How the PSG living annuity works
A living annuity is funded by a lump sum from a retirement product — a pension fund, provident fund, preservation fund or retirement annuity — not by ongoing monthly contributions (you can't add to it monthly). The PSG product requires a minimum of R20,000 and invests across the PSG Wealth platform's unit trusts, personal share portfolios and life portfolios, which you can switch between to adjust your strategy. Growth is tax-free inside the wrapper — interest, dividends and capital gains on the underlying investments aren't taxed, so all returns compound for you (the income you draw is taxed as normal income in your hands). You choose your annual drawdown between 2.5% and 17.5% of the value, adjustable once a year on the investment's anniversary, and paid out monthly, quarterly, half-yearly or annually. There is no capital guarantee — the value rises and falls with your chosen funds.
The crucial decision: getting the drawdown right
The single most important decision in a living annuity is how much income to draw, because it determines whether your money lasts your lifetime. The mechanics are unforgiving: draw too high a percentage, and you deplete your capital faster than it can grow, risking running out of money while you're still alive — the central danger of a living annuity. Draw a lower, sustainable percentage, and your capital has room to grow, supporting your income for longer and leaving more for your beneficiaries. As a rough guide, sustainable drawdown rates are generally at the low end of the allowed 2.5%–17.5% band — the high end is not a target but a ceiling, and drawing near it in early retirement is how people run their capital down dangerously fast. Because the right rate depends on your age, capital, other income, investment returns and how long you'll live, this is precisely the decision where professional advice earns its keep — and PSG offers a free advisor consultation to discuss it. Getting the drawdown right, and reviewing it each year, is what separates a living annuity that lasts from one that fails.
The honest verdict
The PSG Wealth equity-linked living annuity is a capable, flexible retirement-income product for someone who has retired (or is retiring) with a lump sum and wants control over how it's invested and drawn, plus the ability to leave remaining capital to beneficiaries. Its wide fund choice, tax-free growth and low R20,000 minimum are genuine strengths. But a living annuity is not a set-and-forget product — it puts investment and longevity risk on you, and the drawdown decision is critical. It suits a retiree comfortable with that responsibility (ideally with advice) who values flexibility and a potential inheritance for their family; a retiree who wants certainty above all, and can't risk their income, may be better served by a guaranteed life annuity, or a blend of the two. Choose the product on its funds and fees, but get the drawdown decision right — it matters more than anything else.
The wrapper and provider matter less than getting the fundamentals right: the right vehicle for your stage, growth assets for a long horizon, and low fees. Compare investment and retirement options on Rateweb on fund choice and total cost, and match the product to where you are in your retirement journey — because with long-term money, the decisions you make early compound into a very different outcome decades later.
Managing a living annuity well: the annual review
Because a living annuity puts investment and longevity risk on you, it isn't a set-and-forget product — it needs an annual review, and managing it well is what makes the difference between an income that lasts your lifetime and one that doesn't. Each year, on the investment's anniversary (the point at which you can adjust your drawdown), work through a short checklist. Reassess your drawdown rate: is the percentage you're drawing still sustainable given your capital's performance and your age? If markets have fallen, drawing the same rand amount means drawing a higher percentage of a smaller pot, which accelerates depletion — so in poor years, restraint protects your future income. Review your fund choice: as you age, your investment mix should generally become somewhat more conservative, though a living annuity still needs meaningful growth exposure because it may have to fund income for 25-plus years — being too conservative too early is its own risk, as inflation erodes an over-cautious portfolio. Factor in your other income and longevity: your state of health, other income sources and realistic life expectancy all bear on how much you can safely draw. Consider the inflation question: your income needs to rise over time to keep its buying power, so a drawdown that's comfortable today must leave room to grow. This is precisely the kind of decision where professional advice pays for itself — the interaction of drawdown rate, investment returns, inflation and longevity is genuinely complex, and the cost of getting it wrong (running out of money in old age) is severe. PSG's free advisor consultation is worth using for exactly this. The retirees who do best with living annuities are the ones who treat them as an active responsibility: drawing sustainably (usually at the low end of the allowed band), keeping enough growth to beat inflation, and reviewing the whole picture every year rather than setting a drawdown once and forgetting it. Do that, and a living annuity's flexibility becomes a genuine advantage; neglect it, and the same flexibility becomes the rope you hang your retirement with.
Frequently asked questions
What is a living annuity?
A living annuity keeps your retirement capital invested in funds you choose and lets you draw an income you control (2.5%–17.5% a year in South Africa), with any remaining capital passing to your beneficiaries. Unlike a guaranteed life annuity, you keep flexibility and upside but carry the investment and longevity risk — draw too much or earn too little, and your money can run out.
How much income can I draw from the PSG living annuity?
Between 2.5% and 17.5% of the value a year, adjustable once a year on the investment's anniversary, paid monthly, quarterly, half-yearly or annually. Crucially, sustainable drawdown is generally at the low end of that band — the high end is a ceiling, not a target, and drawing near it risks depleting your capital while you're still alive.
How do I fund a PSG living annuity?
With a lump sum from a retirement product — a pension fund, provident fund, preservation fund or retirement annuity — not with monthly contributions (you can't add to it monthly). The minimum is R20,000, invested across the PSG Wealth platform's unit trusts, share portfolios and life portfolios, which you can switch between. Growth inside the wrapper is tax-free.
Should I choose a living annuity or a guaranteed life annuity?
A living annuity gives control, flexibility and an inheritance for beneficiaries but puts investment and longevity risk on you. A guaranteed life annuity pays a guaranteed income for life you can't outlive, but you give up control of the capital. A retiree who values flexibility (and can manage the drawdown, ideally with advice) may prefer a living annuity; one who needs certainty may prefer a life annuity or a blend.
What happens to my living annuity when I die?
Any remaining capital in a living annuity passes to your nominated beneficiaries — one of its key advantages over a guaranteed life annuity, which typically dies with you unless you added guarantees. Beneficiaries can usually take the money as a lump sum or continue the annuity. This ability to leave an inheritance is a major reason retirees choose a living annuity, provided they draw sustainably enough to leave capital behind.
