We all want to retire comfortably. We want to retire with a life without financial worries. When only 6% of South Africans have enough money to retire comfortably, this may seem like a hard ask! Yet as Warren Buffet has shown us, consistency and compounding add up over time.
Easy Equities Retirement Annuity is a great way for new investors to save for retirement. The service offers many benefits like a large choice of funds, low fees, and no minimums. These are features you would struggle to find elsewhere. But what is a retirement annuity in South Africa?
How Do Retirement Annuities Work in South Africa?
Retirement Annuities in South Africa, according to 10X Investments, are defined as: “A retirement annuity (RA) is a retirement fund in terms of the Pension Funds Act. It is a tax effective investment vehicle”
Retirement Annuities are a great way to bolster up your own retirement savings apart from your employers solution. They allow you to invest in the fund, however, you can only access the money when you turn 55. The annuities allow investors to invest in funds that meet specific requirements and allow investors to reduce their taxable income by investing in these funds. This is to a maximum of 27.5% of your annual income or R350 000 per annum.
Retirement Annuities also carry huge tax benefits upon withdrawal. Retirement annuities allow beneficiaries to take up to 30% of their annuity as a lump sum at age 55. The rest must be used to buy a pension fund or living annuity.
This lump sum is taxed on a sliding scale with the first R500 000 being tax free. This means all returns, capitals gains, etc up to R500 000 in your retirement are tax free.
How Does Easy Equities Retirement Annuity Work?
Easy Equities Retirement Annuity is a service offered by the company who brought us Easy equities Fractional Share Investing, Easy Properties, Easy Equities USA, Easy Equities Australia, and more! The company falls part of the Purple Group which is a publicly traded company on the JSE.
Easy Equities is known for is online-based, easy to use, fun, and low cost investments. They have brought this to Ras. Unlike many other companies where your lumps sum has to be R50 000 or your monthly contribution has to be R500, Easy Equities RA has no minimums. This means you can start investing in your retirement for as little as R10 a month, helping you start with good saving habits early!
Easy Equities Retirement Annuity also allows its investors to choose from an array of registered funds with reputable fund managers. If you are unsure of which to choose from, speak to a registered financial advisor who can assess your current situation. You can also check out their fund offerings here!
So now with a new place to consider investing your retirement savings, there is no reason to put off your research any longer! Start researching and start saving for your future!