The short answer

Moving from saving to spending means planning for a different risk: bad timing early in retirement, when withdrawals turn temporary market falls into permanent losses. Start three to five years ahead. Reduce risk gradually, and keep one to two years of spending in cash — part in baht, part in hard currency — so you never have to sell after a fall. Decide what to do with the cash lump sum, choose between a living annuity, a guaranteed annuity or both, set a sustainable drawdown of around 4% to 5%, hold a meaningful share offshore, draw from the right pots in the right order, and review every year. Lawrence will build the plan with you, free.

What really changes when you stop saving

The biggest change isn't the money — it's the job the money has to do. In accumulation, the aim was the biggest possible pot. In retirement, the aim is a reliable income that lasts as long as you do, in the currency you spend.

When to start planning the switch

• Five to ten years before — keep contributing, use your offshore allowance each year, trace old funds.
• Three to five years before — start reducing risk gradually, build a cash reserve, decide how much will be offshore.
• The year before — decide on the cash lump sum and annuity, get quotes, plan tax and currency, line up your first year's income.
• At retirement — switch the income on, with the cash bucket in place.
• Every year after — review the drawdown, rebalance, refill the bucket.

Because a retirement annuity can be retired from any time from 55, and you choose when, you can also time the switch around your move to Thailand and your tax residence decision.

The biggest risk: bad timing early on

While you're saving, the order of good and bad years barely matters. Once you're drawing an income, it matters enormously. Sell investments to fund your income during a fall, and those units are gone — they can't recover with the market.

The chart at the top of this page shows it with simple numbers. Two portfolios start with R6 million and pay R300,000 a year. Both have exactly the same returns over twenty years — two bad years of −15% and eighteen good years of +7%. The only difference is when the bad years come. If they come at the end, about R6.3 million is left. If they come at the start, only about R2.1 million is left. Same returns; more than R4 million difference. This is called sequence-of-returns risk.

For a South African in Thailand, there's a second sequence risk: a sharp fall in the rand early in retirement, which pushes you to draw more rand to cover the same baht costs. Planning for both is what protects your income.

Same returns, different order

R6 million, R300,000 withdrawn at the start of each year, over 20 years.

Simple illustration: two years of −15% and eighteen of +7%. Not a forecast.

How to protect yourself

1. Keep one to two years of spending in cash, so a fall doesn't force you to sell.
2. Reduce risk gradually in the years before retiring, rather than all at once.
3. Hold a balanced mix of shares, bonds and cash — not all shares, not all cash.
4. Set a sustainable drawdown, and lower it at the anniversary after a bad year if you need to.
5. Cover essentials with secure income — a GEPF pension or a guaranteed annuity.
6. Hold part of your money offshore, so a weak rand doesn't force extra rand withdrawals.

The bucket approach

Many retirees organise their money into three buckets:

Living annuity income and investment income flow into the cash bucket. In good years, you refill it from shares; in bad years, you live on cash and bonds while markets recover. Keeping part of the cash bucket in hard currency offshore means a weak-rand month doesn't force a bad conversion. Our guide to building retirement income from investments explains it in more detail.

Where to start

An income plan built around your funds, and the right accounts and providers for the money.

How much can you safely take?

A living annuity lets you draw between 2.5% and 17.5% a year — far more than most portfolios can sustain at the top end. A starting rate of around 4% to 5%, rising with inflation, gives a good chance of lasting thirty years; retirees willing to cut back after bad years can start a little higher. On R6 million, that's about R240,000 to R300,000 a year.

Secure income changes the picture. If a GEPF pension or guaranteed annuity covers your essentials, your living annuity only has to fund the extras, and a bad year means postponing a trip rather than missing the rent. Our guide to living annuities and other retirement income explains the choice.

Your income sources compared

The main sources of retirement income for South Africans in Thailand.

A general guide. The right mix depends on your spending, health and family.

Which money to draw first

There's no single rule, but a common order for South Africans in Thailand is:

1. Secure income first — GEPF and any guaranteed annuity cover essentials.
2. The living annuity at a sustainable rate — not the maximum.
3. The cash bucket in uneven months and after market falls.
4. Offshore savings in weak-rand years, rather than raising the drawdown.
5. Taxable investments in a way that spreads income across tax years.
6. The tax-free savings account last, if you have one, as it grows free of South African tax.

The right order also depends on tax in both countries, so plan it with advice.

The cash lump sum: how much, and where to put it

At retirement from a pension fund or retirement annuity, part can usually be taken in cash, taxed under SARS's retirement lump sum table, which has a tax-free first portion. The rest must buy an annuity. Taking the cash isn't compulsory, and it isn't always best: money left in the fund becomes annuity income, while cash becomes savings you manage yourself.

• Take it if you want a hard-currency reserve offshore, to clear debt, or to fund a home in Thailand.
• Leave it if you want more annuity income, or you'd only leave the cash sitting in a bank.
• Remember the table is cumulative — earlier lump sums count against the tax-free portion.
• Move it offshore at a good rate, on your allowance while you're resident.

Our guide to retirement annuity and pension considerations for South Africans abroad explains the options in detail.

From rand to baht: your currency plan

In accumulation, the rand mattered for how your investments grew. In retirement, it matters for next month's budget. A rand that weakens early in retirement can push you to draw more just to stand still in baht.

• Hold a meaningful share offshore — in the living annuity's offshore funds and savings moved on your allowance.
• Keep a baht reserve of a few months' spending.
• Keep a hard-currency reserve to draw on when the rand is weak.
• Convert on a routine, and use a specialist for large sums.
• Budget at a rate weaker than today's.

Our guide to currency risk on pension income explains how.

Reshaping your investments

Your retirement annuity's investments were built for growth over decades, within Regulation 28. Your living annuity's investments need to do a different job: pay you reliably, keep growing enough to beat inflation, and — for someone in Thailand — protect you against the rand.

• Move gradually from growth to a balanced mix in the years before you retire.
• Use the living annuity's offshore freedom once you retire.
• Keep enough in shares to keep pace with inflation over thirty years.
• Cut charges — check the Effective Annual Cost.
• Rebalance once a year, at the anniversary.

Our guide to portfolio reviews and rebalancing explains how.

Tax in two countries

Annuity income is South African-source and taxed by SARS at source, whether or not you're resident. If you're Thai tax resident, foreign income arising from 2024 that you bring into Thailand can be taxable there too, and the South Africa–Thailand tax treaty decides who has the first right. The cash lump sum is taxed in South Africa under the retirement table. Plan the timing of large withdrawals and transfers with advice, and keep your tax certificates and transfer records. Our tax residence guide explains the rules.

The mindset shift

Many careful savers find spending harder than saving. After decades of building the pot, watching it go down can feel like failure — even when the plan is working exactly as intended. Others go the other way, treating a large living annuity as if it were endless. A written plan helps with both: it tells you what you can safely spend, and when to adjust. The goal isn't the biggest pot at 90; it's a good life in Thailand, funded reliably, with enough left for later years and for the people you care about.

Retire before you move — or after?

For South Africans, the order of retiring and moving to Thailand affects tax, allowances and how easily you can deal with your funds.

Retiring before you move

You can deal with your fund, the cash lump sum and the annuity purchase while you're in South Africa and still resident — with your bank branch nearby and your allowances available to move the cash offshore. Many people find this the simplest route.

Retiring after you move

A retirement annuity can stay invested and be retired from later, from Thailand. That can make sense if you want to keep contributing, delay the decision, or keep the option of the three-year rule open if you cease residence. But paperwork from abroad takes longer, and if you've ceased residence, moving the cash lump sum needs tax compliance approval rather than your allowance.

Either way, decide on tax residence first, because it affects the tax on the lump sum, how money can leave South Africa and the three-year clock. Our financial checklist before retiring to Thailand sets out the order.

Two retirements, one plan

For couples, the switch from saving to spending rarely happens on one day. One partner may retire years before the other, have a different fund or none at all — a Thai partner often won't have a South African retirement fund. A few points help:

• Plan the household income, not just each person's, so the first retirement doesn't drain shared savings.
• Use both offshore allowances while you're both resident — R2 million each a calendar year.
• Protect the surviving partner — joint-life annuities, living annuity nominations and wills in both countries.
• Make sure both of you understand the plan and can reach the money.

Our guide to financial planning for international families covers protecting a partner.

The most common mistakes

1. No cash buffer — forced to sell after a fall.
2. Drawing too much from a living annuity in the first years.
3. Going all-cash at retirement and losing out to inflation.
4. Staying all-shares and facing big falls just when you need to sell.
5. Taking the cash lump sum and leaving it idle in a bank.
6. Keeping everything in rand while spending baht.
7. Forgetting tax in two countries.
8. Never reviewing the drawdown.

Three real-world examples

Hendrik: the cash bucket that worked

Hendrik, 63, retired to Hua Hin with a R6 million living annuity and two years of spending held in cash, half offshore in US dollars. When markets fell in his first year, he lived on the cash bucket and sold nothing at low prices.

Michelle: planning three years out

Michelle, 58, in Bangkok, started planning three years before retiring from her retirement annuity. She moved gradually to a balanced mix, used her offshore allowance each year, and decided to take the cash lump sum to build an offshore reserve.

Lucas: drawing too hard

Lucas, 67, in Pattaya, had been drawing 11% a year from his living annuity since retiring. A review with Lawrence showed the income wouldn't last. He reduced the drawdown to 6% at the next anniversary, and used offshore savings to bridge the gap.

Your saving-to-spending checklist

• Start three to five years ahead.
• Reduce risk gradually.
• Build one to two years of spending in cash.
• Decide on the cash lump sum and where it goes.
• Choose living annuity, guaranteed annuity or both.
• Set a sustainable drawdown.
• Hold a meaningful share offshore.
• Plan tax in both countries, and review every year.

Your yearly income review

1. Compare spending with the plan, in baht.
2. Check how investments did, and rebalance.
3. Refill the cash bucket from good years.
4. Set the drawdown at the living annuity anniversary.
5. Check the offshore share.
6. Review currency and transfer costs.
7. Update tax records in both countries.
8. Check nominations and wills.

Keeping your retirement money safe

Retirement is when people are most often approached with "income" schemes. Be wary of anyone who contacts you first, of guaranteed high returns and of anything you don't understand. Contact providers yourself, never share one-time PINs, and use a private, protected connection on hotel, café and condo Wi-Fi.

How we researched this guide

This guide draws on our South African retirement, tax and currency guides and their sources: retirement-fund rules on the cash lump sum, annuities, living annuity drawdown limits and Regulation 28; the two-pot system; SARS's retirement lump sum table; GEPF and SASSA guidance; allowances; and Thai tax rules. The sequence illustration is a simple calculation, not a forecast. The 4% to 5% starting drawdown is a widely used planning range, not a guarantee. Checked 23 October 2026. This guide is general information, not personal financial advice.