If you retire with a living annuity, the single most important decision you'll make each year is how much to draw. Draw too little and you live more cautiously than you need to. Draw too much and you risk running out later, when you're least able to adjust.
The starting point.
South African living annuities let you draw between 2.5% and 17.5% of your capital each year. Those are the legal bookends. The sensible range is much narrower, usually between 4% and 6%. Anything above roughly 6% starts to rely heavily on above-average market returns to last a full retirement.
Sequence risk, in one sentence.
It matters much more what happens to markets in the first five years of your retirement than in any other five years. A bad run early, combined with a steady drawdown, can damage the capital so badly that even a good recovery afterwards can't repair it. This is why many advisors recommend starting on the lower end of the range and increasing drawdown only when capital has grown enough to earn the extra.
A practical rule.
Start at 4-5%. Review annually. If markets have done well, you can nudge it up a little. If markets have been rough, hold steady or step down. Treat drawdown as a lever you can move, not a knob you set once and forget.
And remember: the drawdown percentage is on the current balance, not the original one. As your capital changes, the same percentage produces different rand amounts. That flexibility is a feature of living annuities, if you use it.