Retirement annuity ?

[Other Pineapple Smurf]

How many people have you heard off in your life that could say: "My Sanlam/Discovery/Old Mutual etc RA really worked out as expected. Ill be enjoying a lovely retirement"

Thats all you need to know about RA's

So true and it's not for everyone.

For me, it only made sense to start taking my RA contributions seriously for tax reasons and my employer is paying the admin fees.

My wife on the other hand is rather going to invest her money as she would need to pay a significantly bigger contribution to match mine when factoring in tax rebate and admin fees.

 

[Tman543]

There was another thread that compared RA to normal investments with a link to an awesome calculator site. In general as I understood it, the RA always beats mainstream investments due to the tax benefit.


EDIT: Found the thread below. RA calculator Link is HTTPS://mymoneytree.co.za/Ra/

Retirement Annuity (RA) or not?

Can put it another way: So if you had 3 mil to invest - would you put it all into a single, undiversified, property or put it in an RA (with good diversification) and rent? I have said this before and I will say it again, never use your own money to invest in property, property only works...

mybroadband.co.za

 

[backstreetboy]

How many people have you heard off in your life that could say: "My Sanlam/Discovery/Old Mutual etc RA really worked out as expected. Ill be enjoying a lovely retirement"

Thats all you need to know about RA's

No it's not. You're talking about old style RA's from insurance companies. It's like comparing a gramophone to streaming music. Not to mention you're ignoring the tax rebate and the less tax you'll pay later.

 

[Scooby_Doo]

There was another thread that compared RA to normal investments with a link to an awesome calculator site. In general as I understood it, the RA always beats mainstream investments due to the tax benefit.


EDIT: Found the thread below. RA calculator Link is HTTPS://mymoneytree.co.za/Ra/

Retirement Annuity (RA) or not?

Can put it another way: So if you had 3 mil to invest - would you put it all into a single, undiversified, property or put it in an RA (with good diversification) and rent? I have said this before and I will say it again, never use your own money to invest in property, property only works...

mybroadband.co.za

The maths assumes that the RA and discretionary investment have the same returns over time which has not been true for the last 11 years. Normalized for currency fluctuations (ie make it Dollar or Pound based), RAs have performed dreadfully.

 

[Tman*]

No it's not. You're talking about old style RA's from insurance companies. It's like comparing a gramophone to streaming music. Not to mention you're ignoring the tax rebate and the less tax you'll pay later.

I had a "new style" RA in a modern investment wrapper from a reputable insurer for 10 years. The fees were high, and the returns were so kak, I would have been better off just leaving the funds in a savings account for a decade.

Sure you do get select companies (Syngia, 10x) where fees are lower, but the bulk of all RA's offered by most of the heavy weights (Sanlam, Discovery, Liberty, Old Mutual, Momentum etc etc) only benefit the financial advisor making a quick buck in commission and the insurer charging crazy fees.

 

[supersunbird]

I had a "new style" RA in a modern investment wrapper from a reputable insurer for 10 years. The fees were high, and the returns were so kak, I would have been better off just leaving the funds in a savings account for a decade.

Sure you do get select companies (Syngia, 10x) where fees are lower, but the bulk of all RA's offered by most of the heavy weights (Sanlam, Discovery, Liberty, Old Mutual, Momentum etc etc) only benefit the financial advisor making a quick buck in commission and the insurer charging crazy fees.

You will never find a member here (there might be some around with a conflict of interest) that recommends a Retirement Annuity with an insurer.

If you had an RA with 10X since 1 Jan 2013 with monthly contributions, about 30% of your current fund value would have been growth

 

[surface]

Another shock for South Africans who need retirement funds to emigrate

It's getting even more complex and expensive.

www.moneyweb.co.za

 

[supersunbird]

Another shock for South Africans who need retirement funds to emigrate

It's getting even more complex and expensive.

www.moneyweb.co.za

My reply to that:

Just trying to understand the fuss (that causes the said anger)… this 3 year wait only applies Retirement Annuities and Preservation Funds where you have already withdrawn a lumpsum once (and maybe Living/Life Annuities), right?

Your Pension/Provident Fund at employer you can fully access (subject to tax as per tax tables that have existed a long time) fully by leaving the employment, and you can also also withdraw everything from a Preservation Fund if you have not already made a withdrawal (subject to tax as per tax tables that have existed a long time) .

I also am not sure what this deferred debt story on retirement savings story is about, if someone can explain what that is about?

 

[surface]

I had a "new style" RA in a modern investment wrapper from a reputable insurer for 10 years. The fees were high, and the returns were so kak, I would have been better off just leaving the funds in a savings account for a decade.

Sure you do get select companies (Syngia, 10x) where fees are lower, but the bulk of all RA's offered by most of the heavy weights (Sanlam, Discovery, Liberty, Old Mutual, Momentum etc etc) only benefit the financial advisor making a quick buck in commission and the insurer charging crazy fees.

I am pretty sure @backstreetboy meant companies like Sanlam, Discovery, Liberty, Old Mutual, Momentum as gramophone companies.

 

[Tman*]

You will never find a member here (there might be some around with a conflict of interest) that recommends a Retirement Annuity with an insurer.

If you had an RA with 10X since 1 Jan 2013 with monthly contributions, about 30% of your current fund value would have been growth

Its a pity that that doesn't stop a massive chunk of individuals in SA "investing" with insurers unfortunately.

 

[supersunbird]

Its a pity that that doesn't stop a massive chunk of individuals in SA "investing" with insurers unfortunately.

Because insurers have sales teams (partly why they are so expensive), investment companies don't.

 

[mr_norris]

How many people have you heard off in your life that could say: "My Sanlam/Discovery/Old Mutual etc RA really worked out as expected. Ill be enjoying a lovely retirement"

Thats all you need to know about RA's

Probably just as many who I've heard say "I have saved more than enough for retirement, it's smooth sailing from here".

 

[beefymoocow]

You will never find a member here (there might be some around with a conflict of interest) that recommends a Retirement Annuity with an insurer.

If you had an RA with 10X since 1 Jan 2013 with monthly contributions, about 30% of your current fund value would have been growth

I’m quite happy with my retirement with my insurer. Don’t work for them but got allot of products with them. And it’s fairly new. Returns are pretty decent.

 

[supersunbird]

I’m quite happy with my retirement with my insurer. Don’t work for them but got allot of products with them. And it’s fairly new. Returns are pretty decent.

So how much % growth since say 1 Jan 2021, after fees?

 

[zerocool2009]

If you are in corporate, big life insurance firms offer better rates vs going in on your own!

Example, fees on R4kk is less than R250 a month which ain’t bad at all! I

 

[beefymoocow]

So how much % growth since say 1 Jan 2021, after fees?

Don’t have that figure. But about 8% since inception but that’s excluding growth on bonuses. And bonuses itself

 

[beefymoocow]

Close to 10% after growth on bonuses. Hopefully it will only go up in time.

 

[supersunbird]

Don’t have that figure. But about 8% since inception but that’s excluding growth on bonuses. And bonuses itself

8.4% pa for me in a simple index fund with inception date of 1 Jan 2013.

13.3% from 1 Jan 2021.

Below self-constructed Coronation RA (1 Mar 2013 inception date) barely beats the above:

 

[beefymoocow]

8.4% pa for me in a simple index fund with inception date of 1 Jan 2013.

13.3% from 1 Jan 2021.

Below self-constructed Coronation RA (1 Mar 2013 inception date) barely beats the above:

View attachment 1123874

If my fund does average before growth on bonuses. I’m happy with that because there’s still the actual bonus itself the IRR doesn’t take into account which is quite significant in my case. About 60% of my contributions. It’s great for me but I’m under no illusion that this was funded through people who early terminated their policy and who bought the incorrect policy which I do feel bad for.

 

[Scooby_Doo]

For shits and giggles.

Core S&P500 index fund CSP500:SJ tracker, is up 99.7% between March 1st 2018 and today.

Edit,

Over 20% per year return.