Why invest in a Retirement Annuity?

Tax-efficient

Legislation which became active on 1 March 2016, we saw an increase in the percentage of your allowable tax-deductible contribution (personal income tax) from 15% to 27.5% of your taxable income or remuneration, whichever is the greater, up to an annual limit of R350 000. 

This means that if you have an existing provident fund at your current employer to which you contribute 15%, you can now enjoy an additional 12.5 percentage points as an allowable tax deduction in an RA.

Furthermore, an RA is exempt from tax on dividends and interest, and you won’t have to pay capital gains tax on the growth earned on your investment. 

You will enjoy a boost on your total retirement savings of up to 30% with the Discovery Retirement Optimizer. 

It teaches us discipline

Many of us are simply not doing enough to ensure a comfortable retirement and delay saving enough.  An RA is like a safe that can only be opened at retirement when you need it.  

You will have yourself to thank for a comfortable retirement

The reality many South Africans are facing is having to retire and survive on only the current government pension grant. I have touched on this subject so many times before, but I will say it again: the more you can save towards your retirement the better especially while you still have time. In today’s terms you would need to have R3 million saved just to pay your medical aid for twenty years.

Cutting back on luxuries may not be much fun, but you will be extremely thankful if you are able to someday retire and still be able to, at the very least, maintain your current lifestyle. 

Your RA benefit is not subject to estate duty

In the unfortunate event of your death prior to retirement, your RA benefit will not be subject to estate duty. 

Make and appointment today, to discuss your retirement plan. Call 074 136 7775