oa Journal of Economic and Financial Sciences - Comparing South African annuity options at retirement
|Article Title||Comparing South African annuity options at retirement|
|© Publisher:||University of Johannesburg|
|Journal||Journal of Economic and Financial Sciences|
|Affiliations||1 University of Stellenbosch and 2 University of Stellenbosch|
|Publication Date||Jul 2014|
|Pages||433 - 450|
|Keyword(s)||Annuitisation, Composite annuity strategies, Life annuities, Living annuities and Switching annuity strategies|
In this study various annuity strategies are compared for South African males who retired during the 30 years from 1960 to 1989. To this end, the present values of the monthly cash flows provided by 47 different annuity strategies are calculated and compared in order to ascertain which strategy would have provided the largest financial benefits. In contrast to previously held general beliefs, the calculations demonstrate that living annuity strategies are superior to composite annuity strategies, which in turn outperform switching annuity strategies, whereas life annuities yield the lowest return.
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