With, a retirement annuity, you also make monthly contributions, usually via debit order, but this is completely independent from your employer. You can choose what funds you invest this money in (within the limits set out by the retirement fund regulations). Meaning, with the help of an experienced investment specialist, the investor can invest in wide variety of funds, from shares, professionally known as equities, bonds, cash, such as money market accounts, and property.
When you retire, at age 55 or older, you’re allowed to take a maximum of one third as a cash lump sum (the cash lump sum is taxable) and the balance must be used to purchase an income annuity. If your total retirement interest in the fund is less than 247500, you are not limited to taking only one third of your savings as a lump sum, you can take the full amount as a cash lump sum, subject to tax. A bonus of a retirement annuity is that if you change jobs, it makes no difference to your retirement annuity, it will just continue as normal.

Your employer’s contribution to your retirement fund, is a fringe benefit, taxed in your hands. Your own contributions to your retirement fund, plus your employers contributions to your retirement fund, are tax deductible up to certain limits, in your hands. The growth and income within your fund while you are a member of the fund is tax free. Tax is only payable when you access your funds as discussed above….(read more)

LEARN MORE ABOUT: Retirement Annuities

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