Endowments ...

[zerocool2009]

Hi guys ...

Hope I get some brokers to read this ...

My question, I have 2 endowments that matured. I requested some feedback on costs and how much they are worth.

What I realise, I should have continued with them (monthly payments) ... But to late now to continue.

The fees are slowly eating up the growth, but the growth is higher than 6%.

Is it worth keeping ?

I know there are bigger factors to think about. But I don't want to write a book.

I was thinking to let it pay out and top up my Satrix account with a lump sum

The one good thing with endowments are, they are internally taxed at max 20%

 

[Hendrix]

FA's love selling Endowments, they get a lot of commission on these.
Rather just buy Unit Trusts or ETF's directly and save on the hidden costs and lock in periods....

 

[gazzak]

Hi

Endowments are in fact taxed according to the four funds tax approach - individuals are taxed at a flat rate of 30% within the structure, not 20%.

There are two main benefits of keeping the money in the endowment structure.
1. The tax rate as mentioned above (It is obviously not an advantage if your marginal tax rate is less than 30%)
2. You may nominate a beneficiary - this ensures that upon death, the proceeds will bypass the estate and the beneficiary will not have to wait for the winding up of the estate to receive the funds. You cant nominate beneficiaries on non 'life' type contracts.

The return in the endowment depends on which underlying funds you are invested in - most endowments have many funds that you can switch into - this depends on the platform, company etc.

Please note that this does not constitute advice in any way.

Hope this helps

 

[zerocool2009]

Hi

Endowments are in fact taxed according to the four funds tax approach - individuals are taxed at a flat rate of 30% within the structure, not 20%.

There are two main benefits of keeping the money in the endowment structure.
1. The tax rate as mentioned above (It is obviously not an advantage if your marginal tax rate is less than 30%)
2. You may nominate a beneficiary - this ensures that upon death, the proceeds will bypass the estate and the beneficiary will not have to wait for the winding up of the estate to receive the funds. You cant nominate beneficiaries on non 'life' type contracts.

The return in the endowment depends on which underlying funds you are invested in - most endowments have many funds that you can switch into - this depends on the platform, company etc.

Please note that this does not constitute advice in any way.

Hope this helps

Thanks so far for everyone's input