Evil landlord & RAs...

Most RA's are a tax in and of themselves. Yet to meet a single person who was happy with an RA return rate if they actually knew anything about it. Fee's eat up all your returns.
 
Cius said:
Most RA's are a tax in and of themselves. Yet to meet a single person who was happy with an RA return rate if they actually knew anything about it. Fee's eat up all your returns.
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I'm quite happy with my Allan Gray RA that is invested in their balanced fund.
 
fire2029 said:
Lets assume

1. a R1m investment.
2. a 40% tax rate; which stays the same throughout.
3. the returns are the same for any investment. For arguments sake a global 10% return regardless of your investment.

Choice 1=Pay tax now & no tax later => R1m x (1-40%) x ^ 10 years to retirement
Choice 2 = No tax now , grow 10% and then tax at 40% => R1m x 1.1 ^ 10 years x (1-40%) to retirement


In this case, choice 1 = choice 2. What am I missing?
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You can have more invested in option 2, so the outcome will be higher.
 
Do you have to pay tax on your RA withdrawals? What if you draw down at the income tax threshold? And then fund the rest of your lifestyle using capital gains, and TFSA withdrawals?

Also, upon retiring, if you have a much bigger RA than your ANC wife, can you switch your marriage to community of property and boost your tax exemptions?
 
Pegging said:
No FA.

I wouldn't use a FA for an RA.
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When I signed up for my RA it was not possible to get an RA without a financial advisor. It was baked into the system. A big part of why most RA's where so terrible.
 
Cius said:
Most RA's are a tax in and of themselves. Yet to meet a single person who was happy with an RA return rate if they actually knew anything about it. Fee's eat up all your returns.
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Another happy RA'er here.
 
Cius said:
Most RA's are a tax in and of themselves. Yet to meet a single person who was happy with an RA return rate if they actually knew anything about it. Fee's eat up all your returns.
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I'm with 10x (for the RAs I actually control after leaving those employers).
In different preservation funds - very happy with the returns, given the risk restrictions on the investment type, and the fees are actually minimal
 
Cius said:
When I signed up for my RA it was not possible to get an RA without a financial advisor. It was baked into the system. A big part of why most RA's where so terrible.
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"Were" (I'm assuming that is what you meant) being the operative word there. Newer generation low-cost RA's are very good savings vehicles.
 
Cius said:
When I signed up for my RA it was not possible to get an RA without a financial advisor. It was baked into the system. A big part of why most RA's where so terrible.
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The Life assurers RA's were bad, they did have an insurance component in it I think which paid out if you died before 55 or something.
So if you died it would be beneficial, but it was expensive.

That is the fees. I have a bit in Satrix MSCI as well because AG don't go all in on Overseas equity.

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fire2029 said:
Lets assume

1. a R1m investment.
2. a 40% tax rate; which stays the same throughout.
3. the returns are the same for any investment. For arguments sake a global 10% return regardless of your investment.

Choice 1=Pay tax now & no tax later => R1m x (1-40%) x ^ 10 years to retirement
Choice 2 = No tax now , grow 10% and then tax at 40% => R1m x 1.1 ^ 10 years x (1-40%) to retirement


In this case, choice 1 = choice 2. What am I missing?
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What you're missing in your sum is that the annual income would be taxable outside of an RA, whereas it is tax free for the duration of the RA. Added to that, outside of an RA you're paying the tax up front as well as CGT on the growth, whereas in the RA you aren't.
 
Pegging said:
The Life assurers RA's were bad, they did have an insurance component in it I think which paid out if you died before 55 or something.
So if you died it would be beneficial, but it was expensive.

That is the fees. I have a bit in Satrix MSCI as well because AG don't go all in on Overseas equity.

View attachment 1776623
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How often do they ask you to rebalance so you comply with Reg28 allocations?
 
fire2029 said:
How often do they ask you to rebalance so you comply with Reg28 allocations?
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I mean could you theoretically allocate maximum offshore exposure 45% now. Lets assume ffshore conitnues to outperform ...at what point do they ask you to rebalcen to be in line with reg28 offshore limits?
 
Cius said:
Unusually good. What does the financial advisor take because that ratio is typical of big in house pension funds in SA?
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That's on the expensive side
  • 10X starts at 1.04% for the first R1m, and then drops lower as the balance increases
  • Sygnia is 0.4% for the first R2m
 
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