The Best Retirement Annuity
Is there something like the best retirement annuity (RA)?
Lets answer it by looking at the features of a retirement annuity:
- The main purpose of a Retirement Annuity is to let you save money for retirement.
- The Second reason is that you get tax back from every contribution, equal to your tax rate. (Example: If your tax rate is 30%, for every R1.00 you contribute you get back R0.30) BY reinvesting the tax back you can decrease your required contribution by 20% or increase your end value by 30%)
- A Retirement Annuity is there for you to guarantee that you will earn some income on retirement. That is also the reason why you cannot withdraw or excess it before retirement or age 55.
- Question: Why you can only withdraw up to 1/3 of the value when you take a retirement option? Answer; If you could take the full amount and make the mistake that over 35% of pensioners make, and buy a business with no skills you might land up losing your business within 5 years and have no income for retirement. 80% of new business fail within the first 3 years.
- What should the 1/3 be use for? To pay of your last debt and make provision for a emergency fund.
About the best retirement annuity
Does not matter though which company you take your retirement annuity. If it is a stand alone product, with the same premium, same yearly increase, same funds you will get almost the same result.
What makes the difference between retirement annuities?
- When you belong to a reward program like vitality, multiply, reality etc, and the insurer gives fee discounts because you have multiple products with them, then your fees might decrease and might give you a bigger end value.
- Because a retirement annuity is a long term product, you don’t take a short term view on funds. To move to much between funds can be detrimental. Only in case of real bad weather one go for a change in fund.
- You risk profile will give you some direction on the risk you should take and the expected return you will get.
- Stick to your goal
- Having more than one retirement annuity also give you diversification and more options with your fund when you over age 55.
Your financial advisor will assist you during your life time where to invest in the best retirement annuity and make the best investment to maximize the end result.
Get quotes HERE from multiple insurers for your retirement annuity from us.
We compare there underlying costs and give you a possible outcome.
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