Retirement annuity + general investment advice

[Affieplaas]

The two main constraints with RA's are the facts that they must comply with regulation 28 (so limited exposure to foreign assets) and the fact that you are limited to a max of one third of the investment as a cash withdrawal at age 55 - the rest will be paid to you as a monthly annuity based on life expectancy / firm monthly draw down amount etc. Third issue is potentially the costs that the financial institution will charge - it can eat up a large chuck of the growth.

The benefit is of course the immediate tax relief on contributions. Then again, you will eventually pay the tax (including on the capital growth) on a monthly basis as you receive the monthly annuities.

 

[Scooby_Doo]

Old Mutual responds to complaints of low returns

Client says underlying funds performed well, but fees absorbed most of his growth.

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