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Best Performing Retirement Annuity South Africa

What Is It?

An RA or Retirement Annuity is a tax-efficient investment plan. It is different to a life insurance policy where the financial compensation is seen only after the breadwinner dies, a retirement annuity will benefit you after you decide to stop being a part of the workforce after a life of labour. There are three companies, in particular, that stand out as contenders and with most of these options, you, fortunately, won’t be paying more than 1.2 percent in fees. Each company will come with their own pros and cons but all three of these are solid options. There really is no true one best option as each will have their own level of suitability for your life

How To Get Started?

You must be sure to only follow the advice of an FSCA approved advisor and no one else claiming to be able to advise you. Check your advisors name on their website and make sure they are approved because the decisions you are making right now will affect your future, so you will always want the absolute best advice there is available. When researching your options make sure to stay away from companies that cannot have their reliability and time in the industry confirmed.

The last thing any person wants to do is get tied up in a plan that does not have your best interest at heart. You need to be sure about your decisions.

The Overall Best Funds

Starting with the Sygnia Skeleton Fund Balanced 70, this particular RA seems to be one of the best. Boasting a 0.46 percent tax fee per annum with a 0 percent admin fee till you have accumulated over two million rand in the fund. You can start by investing R500 a month or a lump sum of R20000 making entry points possible for the majority of those looking for a good retirement annuity fund.  

The next fund is from Outvest, where the fees are a little higher but RA benefits like flat fees start earlier.   They have partnered with CoreShares (a local ETF provider) to offer three funds, namely, the OUTCautious, OutStable and OUTModerate. All of these funds can be used to secure your future with an RA. Their fees being more than double Sygnia is something to think about with overall fees on your RA being 1.5 percent per annum.

ThinkDirect has partnered up with Prescient to ensure your fund will be a safe and fruitful one. Prescient has been around for over 20 years and have accumulated and currently manage hundreds of billions of rand. While administering over 500 billion they also are a confirmed and registered provider with the FSCA which is already letting you know that this is a legitimate fund. Their fees can be as low as 0.50 percent but will not go over 0.68 percent per annum and you can start investing in your future using a R20000 lump sum. They use a mixture of active and passive funds to build and grow your fund’s portfolio and have been a trusted RA choice now for many years.

At the end of the day, you will be the only person that can say which RA will suit you best. Consulting your FSCA approved advisors will always help this process and securing a better future today will not end up being a regret when you turn 55 and the rest of your life is already sorted because of the decisions you made at 20.

Why Should I Invest?

Despite slight improvements in the statistics, South Africans still seem to be quite far behind a comfortable standard when it comes to saving according to the Reserve Bank statistics released in 2015. Securing your future is important. Many financial institutions have surmised that roughly 6 percent of all South Africans are capable of retiring comfortably. Considering so many people will work to retire to not retire at all is a sad fact that can be changed by changing the way we save.

It is always necessary to consult with your choice of a registered financial advisor but it does not take an FSCA approved agent to tell you the benefits of saving tax on your taxable income. When you have a retirement annuity you are allowed to put up to 27.5 percent of your taxable income into it making that money not taxable and potentially putting you in a more affordable tax bracket while still saving for your future.