During retirement, you are supposed to make sure that you have enough personal savings so that you ought not to face any financial problems after finishing work. In addition, you should decide whether to take the lump sum of money or leave it in the retirement account, or annuitize it.

You may also decide to let the company set up an instalment plan or buy an annuity; the best approach is to look for a professional advisor that you are comfortable with and go over all the options to ensure you understand the rules and conditions.

Receiving a South Africa Retirement account in a single payment is a big problem because you will be forced to pay taxes on its right way and a small distribution of payments is less likely to be pushed into a higher tax bracket or lose any income-sensitive tax breaks.

To avoid paying unnecessary amounts in tax, retirees put their retirement funds into bonds or a fixed-income account and attempt to live off the income. In addition, you can opt to annuitize a portion of the retirement saving in instalment payments from the company pension plan or purchasing an annuity from any post-tax proceeds of large sum distribution.

Finally, you can also buy an immediate annuity on a large sum before opting for the company plan. You should compare the annuities offered by insurers and mutual fund companies, although annuities are not always great investments, they do provide retirees with a guaranteed income stream for life. It is wise to hold an annuity in addition to another product as this simply manages your retirement income, which you can enjoy for a long period of time.