Retirement Annuity

Investing your money through a retirement annuity means you can expose it to growth assets like shares, which will help your investment returns to soar above inflation rates. A retirement investment is not a quick-fix, and requires time to grow to truly benefit from the compound growth that is the nature of a retirement annuity.

With a retirement annuity, you’ll benefit from the significant tax concessions related to this type of investment – enabling you to benefit more from the investment.

SA Financial Planners retirement annuity benefits:

  • You get to make regular and lump-sum contributions throughout the investment period of your retirement annuity.
  • These contributions are tax deductible (within limits), so the money you would have handed over to SARS can instead grow in your annuity. The returns on this investment aren’t taxed, making this an attractive retirement investment option.
  • A retirement investment is flexible enough to bend with your financial situation – should you have trouble making a contribution along the way, you can skip four monthly payments by using contribution holidays.
  • Staying invested with SA Financial Planners until the end of your investment term will mean you get back a loyalty bonus, which comprises most of the administration fees on your investment.
  • Your ability to select from a range of investment funds (managed by leading South African fund managers) gives you access to financial markets.
  • A retirement annuity is a protected investment – only you or your dependants can have access to it, so it’s safeguarded from any potential creditors.
  • If you were to die prematurely, you money is exempt from estate duty, meaning there’s more of it for your dependants.
  • When you retire, you have access to one third of your investment in the form of a cash lump sum, a portion of which is tax free.
  • When you retire, you must buy a compulsory annuity with two thirds of the proceeds, which will provide you with regular income while you are retired.

How it works:

  • Investment entry age: one year to 69 years old
  • Age at which to retire: after age 55 years old
  • Savings term: save for 70 years, after which you can continue investing in 3-year cycles
  • Ongoing contribution: a minimum of R250 per month
  • Lump sum contributions: adhoc lump sums can be invested at a minimum of R5 000 at a time
  • Contribution growth: your regular contributions should be automatically increased on an annual basis to counteract inflation increases
  • Contribution replacer benefit: if a disability sets you back before your retirement, the contribution replacer benefit will continue to pay your monthly contributions until the end of the benefit term
  • Enhancer benefit: this benefit will give you the opportunity to plan for tax at retirement if/when you opt for the one third cash lump sum, and your retirement annuity is at least five years old when you retire.

If you have any questions, please complete the contact form with your details and we’ll call you.