How Does A Retirement Annuity Work In South Africa

A retirement annuity may commence at any age and allows the investor to have access to the proceeds between the ages of 55 to 70 years.

How does a retirement annuity work in south africa. It s not linked to. I transferred my previous pension to a retirement annuity and the current value of my retirement annuity is r 1 9m and i am contributing r1000 pm. So for example if you earn r500 000 a year and contribute r50 000 to an ra during the year you re only taxed on r450. An annuity is a financial product.

Investing in a retirement annuity will provide you with some immediate tax benefits along with a number of other financial advantages in the long run. As member of a pension pension preservation or ra fund you must use at least two thirds of your fund proceeds at retirement to purchase an annuity once your fund value is more than 247 500. South african expat living abroad. The marital systems in south africa and how they affect retirement fund claims marriages in community of property the pension interests of the spouses will form part of the parties joint estate and the non member spouse will be entitled to claim 50 of the pension interest of the member as at the date of the divorce.

Retirement annuities in south africa are governed by the income tax act 58 of 1962. When you retire from the fund two thirds of the retirement annuity must be used to purchase an annuity which will pay you an income in retirement. I am 55 years old and after working in west africa for the past year earning. If you ve ever wondered what is an annuity our guide will help you understand the key details so you can decide whether an annuity might be right for your retirement plan.

Here s what you need to know about your retirement annuity cashing it in and moving the proceeds abroad. In short you pay less tax. Tax benefits one of the biggest benefits of a retirement annuity is the tax breaks and deductions. Is a retirement tax efficient.

A key incentive for an individual to invest in a retirement annuity is the tax savings opportunities offered to the investor throughout the term of the contract. Many south africans who have emigrated or relocated to other parts of the world often think that this relocation means leaving everything they once knew behind including certain financial investments like retirement. How does an annuity work.