Retirement Annuity

Is a long term personal retirement plan which enables you to save tax-efficiently for retirement. You can make lump sum or regular monthly contributions to build up capital that will benefit you in retirement. The contributions paid are tax deductible, currently up to 27.5% of your gross income up to a maximum of R325 000 a year. Your investment is protected from most creditors. At retirement age or from age 55 onwards you have access to 1/3rd of the capital amount as a lump sum and then invest the balance in a selected annuity plan that will pay you a pension/income in retirement.

Living Annuity

Provides a regular income upon retiring from your retirement fund (including retirement annuity, pension, provident or preservation funds). While no tax is payable on any investment gains earned in the living annuity, any income withdrawn will be taxed according to the normal tax tables. Current legislation allows you withdraw from 2.5% per year to a maximum of 17.5% per year as an income.

Compulsory Annuity

Is an alternative to the living annuity and is also purchased on retirement, it provides a “guaranteed income” that will continue to be paid until you or your spouse’s death. Term options ranging from 5 to 20 years can be added to insure income is paid whether the insured is alive or not.

Preservation Pension Fund and Preservation Provident Fund

Is suited for people who have already built up retirement savings as a prior member of a company’s pension or provident fund and there is a change in employment (as a result of retrenchment, resignation or termination) or the closing of an occupational retirement fund. The purpose of this plan is to preserve the tax deductions previously granted on retirement fund contributions and to continue to grow the value of your retirement assets until retirement. Preserving the tax status will assist in no tax to be paid on transfer and still allows the investor access to a withdrawal (which will be taxed) if needed before retirement age. All growth and returns are not taxed within the fund, normal retirement rules apply on attaining retirement age.