RA Termination

[marhsava]

So as the title says, I have a RA with Old Mutual and wanted to know if I will be able to cancel it.

 

[nicbst]

AFAIK you can only get it to pay out at retirement, illness that prevents you from working, or emigration. No pro though.

 

[ITCynic]

How long have you had it ?

 

[marhsava]

How long have you had it ?

I think like 5 years , I was reading somewhere that if you cancel it you will have to pay some termination fee, not sure thou

 

[ITCynic]

I think like 5 years , I was reading somewhere that if you cancel it you will have to pay some termination fee, not sure thou

AFAIK If you cancel it you lose it.

Only when you are 55 can you access it but there is an early termination fee depending on the maturity date of the RA.

I would suggest instead of losing it by canceling, rather speak with your broker to reducing the monthly payments to the lowest possible and keeping it.

 

[^^vampire^^]

If it's an old school RA you are screwed. If it is a newer EFT based you can contact them and change you monthly contributions to 0.

You can only get the money out once you turn 55 or if you financially emigrate (no financial ties, house, bank account, closure of tax number). I moved to Aus but have 2 houses so I can't financially emigrate and therefore can't cash in any of my RAs.

 

[buyeye]

If it's an old school RA you are screwed. If it is a newer EFT based you can contact them and change you monthly contributions to 0.

You can only get the money out once you turn 55 or if you financially emigrate (no financial ties, house, bank account, closure of tax number). I moved to Aus but have 2 houses so I can't financially emigrate and therefore can't cash in any of my RAs.

Why are you keeping the houses?

 

[supersunbird]

So as the title says, I have a RA with Old Mutual and wanted to know if I will be able to cancel it.

You can cancel your RA monthly contributions. If it's an old style life insurance RA, you might be charged up to 15% of the total value if you stop contributing (a causal event as they call it). You can request a quote for the cancellation.

http://www.iol.co.za/personal-finan...wn-the-law-to-assurers-over-penalties-1590927

The initial agreement has since been amended so that, on RA products sold before January 1, 2009, the penalties would be limited to 30 percent, and on RAs sold after January 1, 2009, the penalties would be limited to 15 percent.

If its a newer unit trust RA (Old Mutual do have those) you can cancel the monthly contributions to it without penalty.

 

[Dragonflower]

I don't know if its still relevant or can still be done but my father made his paid up. That effectively stopped the payments that he had to do for the period he could not afford it and when things improved he just started the payments up again after informing them. In both events it will still pay out at retirement.

 

[nlock]

I don't know if its still relevant or can still be done but my father made his paid up. That effectively stopped the payments that he had to do for the period he could not afford it and when things improved he just started the payments up again after informing them. In both events it will still pay out at retirement.

I can confirm this. Did it with mine when I moved overseas.

 

[^^vampire^^]

Why are you keeping the houses?

My mom lives in the one and the other I'm renting out as the financial gain won't be worth the amount I've invested in it at this point if I sell unless someone is willing to pay my asking price.