Retirement Annuity

A Retirement Annuity is a long-term investment structure for building up retirement savings, either on a recurring 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.

What are the benefits of investing in a retirement annuity?

Tax efficiency

A portion of your contribution is tax deductible. 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 a portion of your retirement annuity account tax free. According to the current legislation, the first R500,000 lump sum benefit is tax free.

Investment choice

Prudential regulation

You have access to a range of unit trusts designed to enable you to select one or more underlying unit trust funds to suit your risk profile.

All investment portfolios you select are compliant with Regulation 28 of the Pension Funds Act, to ensure your money is invested prudently across a number of asset classes.

Discipline, flexibility and freedom

You can only cash in your retirement annuity at retirement. However, you have flexibility in that you may switch between the unit trusts at any time, 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 any other approved retirement annuity, without cost or penalty.

Transparent fees and regular reporting

All fees are fully disclosed and we will keep you regularly informed on all aspects of your investment. You may also access your investment information online.

Transfer of wealth

You may nominate a beneficiary 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).

Who should consider investing in a retirement annuity?

You may wish to consider investing if:

you are self employed and not a member of a pension fund or provident fund
your employer is not making any contributions to a pension or provident fund on your behalf
you receive variable income which is not taken into account when your contributions to a pension or provident fund are calculated
you wish to supplement your existing retirement savings
you wish to save for retirement in a tax-efficient way

What are the minimum investments?

The minimum investment is R500 per month. You may also stop contributing at any time without penalty. Escalation rate of 0%, 5%, 10%, 15% or 20% per year.

The minimum once-off lump sum investment is R20,000.

What are our fees?

For unit-trust type retirement annuity, our initial advice fee is 1.50% plus VAT.

Our annual advice fee is 1.00% plus VAT, deducted monthly from your retirement annuity account.

For clients with investment portfolio greater than R6 million, our fees are negotiable on a sliding scale. 

Our product providers

Allan Gray, Discovery, Glacier, itransact, Liberty, Momentum, Old Mutual, Sanlam, Stanlib

Our Preferred providers

Allan Gray

We select Allan Gray as our preferred provider for the following reasons:

1. Reputable asset management company;
2. Financially sound;
3. Efficient administration platform;
4. Clever use of technology delivers excellent user interface;
5. Excellent staff delivers excellent client service;
6. Low platform administration cost;
7. Select range of good performing unit trusts;
8. Easily creates customisable, informative investment overview;
​9. Enables clients to submit instructions online.

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Discovery

1. Reputable financial services group;
2. Financially sound;
3. Easily creates detailed investment proposal;
4. A wide range of internal and external funds;
5. Clever use of technology to provide excellent client service;
6. Costs are competitive;
7. LifeBooster boosts investment value by 5% to 15% depending on Vitality status if life assured dies before maturity;
8. Fee Payback benefit enhances investment value;
​9. Retirement annuity linked to a Life Plan receives a bonus through Life Plan Optimiser.