By Frank Daubenton, CFP ®

Every retiree eventually asks the same question. How much can I safely draw each month without running out of money?

It is a reasonable question, but it is often answered in the wrong way. Too many retirement conversations start with percentages. Drawdown rates, returns, and assumptions dominate the discussion. None of these pay the monthly bills. Retirement does not run on percentages. It runs on Rands.

What matters in retirement is the amount that arrives in your bank account each month after tax. That figure must support a real life with real costs. Housing, food, transport, medical aid, insurance, and the occasional surprise, all compete for the same income. Until those expenses are clear, no retirement plan can be considered reliable.

Consider a simple example. A retiree with R4 million invested who draws 5 percent a year receives roughly R16,600 a month before tax. Someone with R8 million at the same drawdown receives double that. The percentage is identical, yet the lived experience is completely different. This is why retirement planning must start with a clear retirement budget, not abstract ratios.

The deeper concern for most retirees is not market volatility. It is the fear that income will fail them later in life. People worry about becoming dependent on their children, cutting back when health declines, or watching medical costs rise while income remains fixed. These fears are not emotional exaggerations. Retirement now often lasts twenty-five years or more. Decisions made at the start carry long-term consequences.

One of the most common income tools in South Africa is the living annuity. In simple terms, it keeps retirement savings invested while allowing the retiree to choose how much income to draw each year within regulated limits. The appeal is clear. Income can grow over time, capital can be passed on to heirs, and the retiree retains some flexibility. The trade-off is that income is not guaranteed. It requires discipline, ongoing review, and an acceptance that markets will fluctuate. A living annuity works best for retirees who value growth and are comfortable with uncertainty.

At the other end of the spectrum is the guaranteed annuity. This option converts savings into a pension that pays for life. Once the decision is made, the income continues regardless of market conditions or how long the retiree lives. The benefit is certainty. There are no investment decisions to manage and no risk of income running out. The limitation is flexibility. Income increases are usually modest, and there is little or no capital left for heirs. This option suits retirees who place a high value on stability and predictability.

Many retirees find that neither option on its own feels complete. This has led to a growing use of blended strategies. In this approach, part of the retirement savings is used to secure a guaranteed income that covers essential expenses such as housing, food, and healthcare. The remaining capital stays invested in a living annuity to support discretionary spending, provide growth, and preserve a legacy. The result is balance. Essentials are protected, while flexibility remains.

When retirees ask how much is enough, they are rarely looking for a precise formula. They want reassurance. Enough means having an income that covers necessities with confidence, adjusts over time as costs rise, and allows for a sense of control. For some households, that income may be R25,000 a month. For others, it may be far higher. The correct number is personal, but the method to reach it should be careful and deliberate.

Retirement planning is not about outperforming markets. It is about replacing a salary with an income that lasts. When income is clear and dependable, anxiety recedes. When the numbers make sense in Rands, retirement becomes manageable.

Anyone approaching retirement, or already living in it, should revisit their income with fresh eyes. Focus on what arrives each month and what it must support. That is where real certainty begins.

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