Retirement Annuity is a very important tool in helping individuals build up their retirement nest egg in a tax-efficient manner.

A Retirement Annuity is a long-term investment structure for building up retirement savings, either on a recurring, monthly debit order basis or by making a lump-sum investment. A retirement annuity offers significant tax advantages to people who are committed to investing their money until they are at least 55 years old.

Planning now for retirement is an important step towards future financial security. Research shows that many individuals can easily live for 30 years in retirement. To be able to sustain yourself in retirement without relying on your children, family or others for support is an immense challenge that most individuals haven’t properly planned for. If you are serious about your future and about maintaining financial independence, it’s important to make retirement planning a formal part of your life objectives.

Successful retirement planning means that you will have the freedom and control to make your own financial choices. One of the simplest concepts about successful retirement planning is using compound interest to your advantage. This simply means that the earlier you start saving, the faster your money will grow. Starting a dedicated retirement savings plan will help you save over the long term.

You can start from as little as R500 a month, or a lump sum minimum of R20,000.

Investing in an RA is tax efficient. The current legislation allows you contributions to retirement funds of up to 27.5% of your taxable income as tax deduction, subject to a maximum of R350,000 in a tax year.

All your investment growth, including interest, dividends and capital gains within a retirement annuity is tax free.

At retirement age, you may withdraw up to R500,000 from your retirement annuity account tax free.

You invest your money in an investment portfolio that is compliant with Regulation 28 of the Pension Funds Act, to ensure your money is invested prudently across a number of asset classes, such as equities, bonds, property, cash, gold and offshore, while growing your money over the long term.

You can only cash in your retirement annuity at retirement. You may stop and start contributions without any penalties, and if you change jobs, your retirement annuity continues without any need to transfer. You may, at any time, transfer your investment to another approved retirement annuity, without cost or penalty.

At retirement you convert your retirement annuity to a living annuity, to receive a monthly income in retirement.

You may nominate one or more beneficiaries on your retirement annuity. In the event of your death, the money in your retirement annuity account is paid out to your beneficiary, and you do not incur any estate duty (a form of tax).

Contact us today to start saving for your retirement. See you next time!…(read more)

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