looking for a Retirement Annuity

[ronto]

Hello,

I am tired of every tax session having to pay the Tax man some money for my rental income. I was advice to get a retirement annuity in addition to my company pension fund. I did a calculation on the SARs website while doing my return, that if i can contribute to an RA paying R1100 monthly, I will be able to break even with the Tax Man and owe him nothing. At the moment i pay SARs R7000 every tax year renting out my townhouse.

I am looking for an RA that i can apply online, I dont want any financial planners calling me and advicing me.

Do you guys know of any RA i can contribute too ?

Thanks
Ronto

 

[halfmoonforever]

you will have to speak to one in the end, but I would go with Alexander Forbes. They helped me through email. However, pick up the phone first and/or find a direct email to someone you can contact for one. Otherwise you end up waiting forever

 

[diapason]

Hello,

I am tired of every tax session having to pay the Tax man some money for my rental income. I was advice to get a retirement annuity in addition to my company pension fund. I did a calculation on the SARs website while doing my return, that if i can contribute to an RA paying R1100 monthly, I will be able to break even with the Tax Man and owe him nothing. At the moment i pay SARs R7000 every tax year renting out my townhouse.

I am looking for an RA that i can apply online, I dont want any financial planners calling me and advicing me.

Do you guys know of any RA i can contribute too ?

Thanks
Ronto

You don't need an advisor. You can look at the websites of Sygnia, Allan Gray, Coronation, etc and apply online. Why pay an advisor for what you can do yourself - ie a little bit of research on their websites. You will just need to decide what option to go for - there are several with all the RA providers with different costs.

 

[supersunbird]

you will have to speak to one in the end, but I would go with Alexander Forbes. They helped me through email. However, pick up the phone first and/or find a direct email to someone you can contact for one. Otherwise you end up waiting forever

I have a Coronation RA, easy to do everything online. Then you don't have to pay a financial advisor 0.5%pa of your fund value.

I have my own underlying selection of funds, for the novice I would say just select your provider/s (like Allan Gray, Coronation, 10x , Sygnia), then select their balanced fund (like Allan Gray Balanced Fund, Coronation Balanced Plus Fund, 10x High Equity, Sygnia Skeleton 70) and then submit the forms and FICA and then the monthly debit order goes off.

 

[ronto]

Thanks, I want to do it on line, to avoid paying the financial adviser. I will look at the options you have suggested and see which best fits me.

Kind Regards

 

[lord-of-war]

You can not go wrong with Coronation or Alan Gray. Make sure the funds that you select match your risk appetite and time to retirement. For most people the Balanced Funds are a good choices.

 

[Dee96]

Thanks, I want to do it on line, to avoid paying the financial adviser. I will look at the options you have suggested and see which best fits me.

Kind Regards

So what did you end up selecting?

 

[Billy]

As the rental profit liable for tax will probably increase, open up a RA (Coronation, Allan Gray), and then top it up in February each year to maximise the tax benefit.

 

[Tommy3000]

Be sure to check the management fees of any retirement annuity you sign up for, it's like the companies feel they have the right to tax your wealth, it can really eat up your wealth if they chow 5% of your total per annum.

I opened up a Sygnia RA with one of their skeleton funds, because of their ultra-low management fees, it was something like 0.4% per annum, I can't remember the exact number but they were offering more or the less same product (a stock exchange index fund) for the lowest price out of all their competitors.

Bear in mind that by South African law, all RA must invest 75% in the local stock market. So if a depression era style stock market crash ever comes to the JSE, you will basically see your RA potentially wiped out (along with your pension, because pensions are mostly the same boat).

DISCLAIMER: I'm not a financial advisor. Please confirm the above with your own research.

 

[supersunbird]

Be sure to check the management fees of any retirement annuity you sign up for, it's like the companies feel they have the right to tax your wealth, it can really eat up your wealth if they chow 5% of your total per annum.

I opened up a Sygnia RA with one of their skeleton funds, because of their ultra-low management fees, it was something like 0.4% per annum, I can't remember the exact number but they were offering more or the less same product (a stock exchange index fund) for the lowest price out of all their competitors.

Bear in mind that by South African law, all RA must invest 75% in the local stock market. So if a depression era style stock market crash ever comes to the JSE, you will basically see your RA potentially wiped out (along with your pension, because pensions are mostly the same boat).

DISCLAIMER: I'm not a financial advisor. Please confirm the above with your own research.

That part is incorrect, that is the maximum it can be in that asset class.

Maximum shares/equity - 75%
Maximum overseas - 25% (excl Africa)
Maximum property - 25%
Maximum bonds - 100%

Most balanced funds unit trusts (as could be used in an RA) will have about 50% local equity, 20% foreign equity, 5% foreign cash, 5% property and the rest is local bonds and cash.

You can make you own RA with 100% bond funds if you are so inclined.

My own RA I out together using various Coronation Funds has 20% in property...

 

[Dee96]

I have a Coronation RA, easy to do everything online. Then you don't have to pay a financial advisor 0.5%pa of your fund value.

I have my own underlying selection of funds, for the novice I would say just select your provider/s (like Allan Gray, Coronation, 10x , Sygnia), then select their balanced fund (like Allan Gray Balanced Fund, Coronation Balanced Plus Fund, 10x High Equity, Sygnia Skeleton 70) and then submit the forms and FICA and then the monthly debit order goes off.

Looking at the Coronation Balancd plus fund.

How easy is it to do everything online?

 

[supersunbird]

Looking at the Coronation Balancd plus fund.

How easy is it to do everything online?

I can't remember all the details, the initial sign up forms I think I printed out and filled in and signed and scanned in and sent to them, but since then everything gets done online. This was back in 2013.