Best Retirement Annuities (RA) for 2016

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DJPrish

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Hi guys,

Please can you give me some advise on which RA I should take out.
I heard that Sygnia has the lowest costs. Others have told me Allan Gray.

I don't want to manage the RA. Just looking to take one but not sure who is the best in terms of costs & performance.

Thanks.
 
Stevi said:
Have a look at the Sanlam Echo Bonus RA
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Stay far far far FAAAAAAAAR away from Sanlam.

I use Alexander Forbes, some of the stuff they have for me in my RA is between their own fund and Allan Gray. In less than 2 years my RA grew with 20k. For 6 years prior to that my RA made less than R1000 with Sanlam (hence why I moved it)

In addition to that, Sanlam charged me R30k because they can't recoup the "admin fees" that they would have received till I was 55. Recouping the cost of what you paid in commission to the agent who sold me the policy is downright low-life behavior. And then not working with my money to get my investment to grow? No thanks. At least with Alexander Forbes I almost recouped the R30k Sanlam charged me for that crap without me having to contribute more.

stay away from sanlam
 
In a bear market you should be looking at the big institutional investors like Allen Gray, who move the market by themselves. If it's a bull market go for an ETF.
 
I would recommend Allan Gray or any other unit-trust based RA. With an Allan Gray RA you can invest in multiple unit trusts.

Stay away from RA provided by life insurance companies, any growth will be eaten away with fees
 
I've got a Coronation Balanced Plus RA, looked at the Sygnia and Allan Gray - should be fine also but I like sticking with the big trusted an well performing guns Coronation & Allan Gray - stay away from Sanlam etc as listed above
 
Majick said:
I would recommend Allan Gray or any other unit-trust based RA. With an Allan Gray RA you can invest in multiple unit trusts.

Stay away from RA provided by life insurance companies, any growth will be eaten away with fees
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Ditto, please stay away from life insurance companies RA's, you will regret it later, they all promise bonuses, and this and that top up, remember, nothing's free, they have very creative marketing teams.
Go for a RA that has no penalties if you change anything, such as stop paying, adjusting contributions etc...
Look at Coronation, Allan Gray, Sygnia, 10x, they won't screw you!
 
Thanks guys...

Initially my top choices were Allan Gray, 10x, Sygnia & Coronation.

I'm only stuck at choosing one of the 4.

Looking at low costs, high performance based on history of 15-20 years, no penalty costs, flexibility to add or stop contribution to the fund, no management on my part --> Which of these is best suited for me?
 
DJPrish said:
Thanks guys...

Initially my top choices were Allan Gray, 10x, Sygnia & Coronation.

I'm only stuck at choosing one of the 4.

Looking at low costs, high performance based on history of 15-20 years, no penalty costs, flexibility to add or stop contribution to the fund, no management on my part --> Which of these is best suited for me?
Click to expand...

Its ok to choose more than one.
 
Stevi said:
Have a look at the Sanlam Echo Bonus RA
Click to expand...

Most expensive RA in the market today... read your quote... you paying the higher of R40 per month or 4% admin straight out the gate...

Bonus doesn't get you much as they only apply the bonus to the amount of money that you invested after fees and get this... Excluding Growth..

How those Sanlam Actuaries sleep at night is a mystery to me...?
 
Yes it is okay, but only if you plan on enacting the clause of De Minimus" - where you can retire a full RA that is less than R247500 at the time of your retirement...

Otherwise there is no real reason why one would want two or more RA's... The Tax benefit you get will aggregate (currently 27.5% of annual income up to R350 000 can be deducted against annual income Tax as a rebate)

Best thing to do is to opt for the lowest cost for active management...

Allan Gray is about 2 - 2.5% annual costs
10X is about 0.5 - 0.75% with NO active management (problem when you get more money later on in life)
Sygnia is about the same... without active management

All of the above will provide you with flexibility that you seek but if you want active management then you have to pay for it... the only company I know of where you can get the cheapest active management and the most attractive boost is Discovery and their Discovery Retirement Optimizer (but you need a life cover to take this product out, and unless you have the need for life cover then this wont be of much use to you) the DRO has no flexibility but it enables you to not pay any costs on the platform (fees, commissions, and fund management) for any RA savings amounts over R4000 and on amounts less than R4000 you pay about the same as Allan Gray ... The Boost that they pay out comes from your life cover and because of this is Tax free... The boost pays out in yearly cpi increasing increments until the day you die... and can be as much as 60% of your retirement savings and wont drop your life cover by more than 50%...

With the effect of compounding interest over a massive term like 300+ months for retirement product that are heavily fee laden are a curse because you end up paying back up to 60% in same cases of the money you saved after 40 years on a 2.5% annual cost... its criminal! so opting for the lowest cost is very sensible - but watch out for ETF's as they not always all they cracked up to be... They are more for sophisticated investors who have the ability to trade the market buying low and selling high...
 
DJPrish said:
Thanks guys...

Initially my top choices were Allan Gray, 10x, Sygnia & Coronation.

I'm only stuck at choosing one of the 4.

Looking at low costs, high performance based on history of 15-20 years, no penalty costs, flexibility to add or stop contribution to the fund, no management on my part --> Which of these is best suited for me?
Click to expand...

Do you contribute to a pension or provident fund through an employer?

How I do it:

If you do and it's a managed fund, then go RA with 10X or Skeleton fund from Sygnia.

If you do and it's a index fund, then go RA with Coronation (if you are happy with just their funds, Balanced Fund) or Allan Gray (if you want access to AG funds and more funds like Marriot and Coronation and Satrix even)

If you switch employers and it swaps around, just stop the current RA (easy with all of them) and start a new one as per above.

If you just saving in an RA and no employer fund, then do a 50/50 split. It doesn't cost more (except possibly an extra debit order fee if your bank charges you for that).
 
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Sigh. Bunch of noobs here, life insures blah, blah

I searched high and low for a Annuity for my mother a couple of years back, Alan gray, ABSA, Alexander Forbes, all of them required some hands on approached, especially dealing with what it should be invested in.

We settled on Sanlam glacier no issues, the option was picking either a living annuity or a fixed annuity, living annuity worked out the best, and a medium risk profile was selected.In fact just got a statement last night, and the admin fee in total was R2500.00 odd for the year.Interests gained from investments, exceeded what was paid out from the annuity for the first 4 years, this is the first year where the interests didn't exceed what was paid out, it still preformed pretty well, what was paid out was less then 20K.

If you have personal issues with sanlam that is your problem, but don't give advise based on your dislike for a company, just because they provide other services outside of retirement as well.
 
wizardofid said:
Sigh. Bunch of noobs here, life insures blah, blah

I searched high and low for a Annuity for my mother a couple of years back, Alan gray, ABSA, Alexander Forbes, all of them required some hands on approached, especially dealing with what it should be invested in.

We settled on Sanlam glacier no issues, the option was picking either a living annuity or a fixed annuity, living annuity worked out the best, and a medium risk profile was selected.In fact just got a statement last night, and the admin fee in total was R2500.00 odd for the year.Interests gained from investments, exceeded what was paid out from the annuity for the first 4 years, this is the first year where the interests didn't exceed what was paid out, it still preformed pretty well, what was paid out was less then 20K.

If you have personal issues with sanlam that is your problem, but don't give advise based on your dislike for a company, just because they provide other services outside of retirement as well.
Click to expand...

You should express the admin fee as a percentage. And we talking RAs, not LAs. There life insurers do have a relevant place.
 
My RA with Liberty has barely grown. Found out he invested quite a portion of it in money market.
 
abzo said:
My RA with Liberty has barely grown. Found out he invested quite a portion of it in money market.
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My RA was opened in early 2007 with Old Mutual.. So far paid in 320k and its value is 500k. Wondering performance-wise whether that's doing alright or if I should be looking at other options.
 
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