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Retirement Annuity  
You can't beat a retirement annuity for tax benefits and flexibility
A retirement annuity (referred to as an RA) is an attractive investment vehicle for the build up of retirement savings, mainly because it is tax efficient and flexible. RA’s were introduced to give those who are self-employed the same tax incentives as those who are employed and belong to pension or provident funds.
Helpful Hints
The earlier your start investing in an RA the better.
Invest in an RA even though you may belong to a pension or provident fund scheme.
  • Pension Fund Transfer
  • Provident Fund Transfer
  • Preservation Funds
Some of the Features and Benefits of an RA
Income for Life You cannot outlive the regular monthly pension income on a conventional life annuity. Income will be received for as long as you live.
Planned Retirement It is an appropriate way of guaranteeing retirement income. You can retire from your retirement annuity fund at any time between the ages of 55 and 69.
Contributions Tax Deductible Contributions are tax deductible within limits, which means SARS pays part of your premium thereby encouraging you to save for your own retirement. Depending on your marginal rate of tax, this can be up to 40 % of your contributions. You are therefore converting income tax into future retirement income.
Tax Free Lump Sum Various options are available at maturity. Generally, one third of the Capital Amount can be taken in the form of a lump sum, whereby the first R120,000 is tax free in terms of current tax legislation. The balance of the two thirds must be used to purchase a compulsory pension with any registered assurer who will provide the monthly income. If no lump sum is chosen, a higher pension will be receivable. It can be tailor made to suit your needs.
Flexibility RA’s are highly flexible. Premiums can be increased or decreased and additional single amounts can be injected into the policy. It makes no difference if you change your job, stop working or set up your own business. Your RA continues to build benefits for you.
Protection Against Insolvencies Although it has no loan value, money you invest in an RA is secure against insolvencies. It is protected by legislation and cannot be attached by creditors.
Financial Independence Your own pension income minimises financial dependence on your children, the government, family or friends.