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Maybe just to clarify the situation
You invest in an RA which on maturity is switched into a LA or a guaranteed annuity.
The RA can be accessed from age 55 but you can extend until age 70 - but be wary of the fact that each time you extend you could incur additional fees for the extension.
Supposedly current RA are better than historic RA's mine with OMSA was a dreadful disaster. Sanlam are advertising a kind of pension fund which will determine what your payout/drawing would be on retirement - maybe the question needs to be asked what the value of money will be when you do ultimately go on retirement.
With LA you are permitted to draw down 2.5% to 17% per annum in terms of value of your funds in the LA and present calculations are that if you draw down between 6% and 8% per annum you should not run out of funds. You can revise your draw down annually
Be wary of the guaranteed annuity as residual funds upon your death do not go to your spouse/partner but go to the provider as they have supposedly taken all the risk. So look at an LA which upon your death the pool can be paid out as a lump sum or the surviving spouse can elect to continue to managed the LA as if he/she was the owner of the LA.
With your LA many investment advisors will advise you to split your pool 75% riskier equities and 25% in more conservative counters - this could compromise you down the line as it may affect the % draw down that you can decide on annually - I personally have moved my entire fund into riskier shares where it is in the Coronation T20   fund and I take a 2.5% annual draw down as I don't need the funds

I think it is very important that you look at your total financial position in terms of earning capacity, whether you have insurance on your bond, overdraft, motor vehicle and any other large debt, that on your death these debts are covered by the insurance and your spouse doesn't inherit massive debt. If you cover these items and have a reasonable pension fund then you also need to examine whether you really need carry any form of life cover especially if your kids are off your hands.
Both my kids have been encouraged to set aside 22% of gross income towards pension funding which will ensure that on retirement they will both be comfortable whilst on pension
In my opinion RA's are not the most ideal mechanism for providing for retirement and in fact if we had SATRIX type instruments 35 years ago I would have opted for them over an RA any day as fees and growth are either exorbitant or overstated
 

A huge benefit of a RA is that your contributions are tax free (max 15% of salary).  When you retire you would then pay tax on the monthly withdrawal at a lower tax rate.
So you defer your tax payment to post retirement.

Your situation is a bit more complicated since you work abroad and probably don't pay taxes to SARS.

Have a look at the RA products being offered by FSP's.

This is from Sanlam's FAQ: https://www.sanlam.co.za/personal/retirement/savingforretirement/Pages/sanlam-retirement-annuity.aspx

A Retirement Annuity is an effective way to save for retirement because:

Your savings provide you with an income in your retirement years
When you retire, you may take up to one third of your accumulated savings in a cash lump sum. The rest is used to provide you with a monthly income.
You save tax
Your retirement annuity contributions reduce your taxable income up to certain limits: part of your contributions come from tax savings, which means that the South African Revenue Service (SARS) is actually paying a part of your retirement savings. Another big tax advantage is that the growth on your investment is tax free.
Your savings are protected from your creditors
Your retirement savings are safe irrespective of any personal financial loss you may suffer. This ensures that your savings will be available when it is most needed and for what it is intended - the provision of your retirement income.

There is a very interesting article on Moneyweb titled Your RA must have a plan

Also it is not true that proceeds of a draw down on an LA have a tax advantage - they don't. Draw downs from an LA are added to your pension income and tax based on your total income and of course the company holding your LA pool of funds also levies charges for administering the LA and sending you quarterly updates
So my advice read up on all these issues prior to diving in and making rash decisions

Yeah, I read that article but from reading your first post it would seem you would have invested in ETFs rather than RAs if you had them back them So would you say I should rather invest in ETFs than in an LA or RA?

My view: If you're not getting the tax benefit of the RA, then rather go for ETFs. They'll most likely be far lower in fees, not have any penalties, and you can change the instruments as you like. Plus they'll most likely outperform an RA as they can be 100% in equity.

Quote from: gcr on October 12, 2015, 01:19:39 pm

There is a very interesting article on Moneyweb titled Your RA must have a plan

Also it is not true that proceeds of a draw down on an LA have a tax advantage - they don't. Draw downs from an LA are added to your pension income and tax based on your total income and of course the company holding your LA pool of funds also levies charges for administering the LA and sending you quarterly updates
So my advice read up on all these issues prior to diving in and making rash decisions

The taxable aspect is correct but you can save on levies/admin fees in you go directly, e.g. Allan Gray - zero charge other than the TER which is built into the unit price.

So there are levies?