What is a Retirement Annuity?
Portfolio:
- You can invest in a large range of unit trusts, ETF’s and other funds.
- Your portfolio is restricted in terms of Reg 28 of the Pension Fuds Act.
- Your asset class weighting will depend on your age and/or risk weighting.
Flexibility:
- Complete flexibility including withdrawals at any time.
- Changes can be made any time – debit orders, lump sums and switches between portfolios.
- RA’s can only be withdrawn from after 55 years of age.
Contributions:
- Current legislated limits to how much you can contribute to an RA to get a tax deduction. Limits are the greater of:
17.5% of taxable income OR
R 350,000.00 - Debit orders and lump sums can change at any time.
Taxation:
- There is no tax on returns in this vehicle. Including on payout.
- Withdrawals or payouts are taxed as withdrawals as per tax tables.
- When you retire from this investment you are entitled to tax-free lump sums and can also write off excessive contributions (if any) against these and income paid.
Penalties – There should be no penalties payable on your investment for making changes detailed. Avoid any products that have penalties imposed or restrict your flexibility. Advice based fees combined with flexible investment products are available and give you more control in a world where change is inevitable.
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