Best way to retire on R25 000 000?
A friend just inherited R25 000 000 (yeah... it is always someone else) he is the same age as me, 60 years old and obviously now wants to retire. An FA offered him a Life Annuity for R16 000 000 that will pay him R58 000 monthly after tax and increase by6 % every year. The rest he says will go into an investment portfolio. I told him the Life Annuity sounds good because it gives a guaranteed income but if it has to last for say 30 years in South Africa that 6% increase will surely deplete his income what with real living cost increases like Eskom, Medical Aid and Woolworths food prices. I am not 100% clued up on investing but it seems to me that a discretionary portfolio would be a better idea since it can be adjusted over the years depending on the economic situation in SA plus, he will always have access to all of his capital? He has always been a contractor and does not have an RA and so he feels that the Annuity is a "proper" solution.