Financial planning is crucial for retirement, it will influence and define your standard of living and financial freedom in your retirement years.

You can expect the following benefits when starting a retirement annuity plan:


        1.  Tax savings:

  • At marginal rate.
  • No tax payable inside the Retirement Annuity – growth tax free.
  • That’s no income tax on interest earnings, no capital gains tax.

    2.  Your Retirement Annuity is NOT part of your Estate:

  • Trustees will look after dependents with fund value should you throw off your mortal coil.
  • No creditors can touch your Retirement Annuity savings.
    • Divorce & SARS only exceptions.
  • No estate duty is payable.
  • You can save 20% on estate duty. (Provided you do not contribute large lump sums just to get it out of your estate and bypass estate duty, SARS has changed the rules to eliminate that kind of tax avoidance)

    3.  Boost your savings:

  • By reinvesting tax savings you are getting tax savings on your tax savings.

        4.  There are low cost diversified investment options available:

  • Regulation 28, placing some limits on the percentage invested in each asset class.
  • Creating a more balanced to moderately aggressive portfolios.
  • Better asset class diversification should lead to better long term return on investment. Which means more money!

        5.  Tax Free lump sum @ Retirement:

  • The first R500 000 lump sum is currently tax free at the retirement age of fifty-five and onwards.
  • The next R199 999 will be at a low tax rate of 18%.
  • Note these figures may change over time, although the tendency has been to improve the benefits for investors.

        6.  Lower tax rates during retirement

  • Your tax rate will likely be lower at retirement.
  • Additional tax rebates from the age of sixty-five.
  • Pay less tax than you would now.


Retirement Annuity Restrictions:

  • Only get access to the funds at the age of fifty-five.
  • Take 1/3rd lump sum and 2/3 invest for drawing down income to replace your salary.



Whether your are young and just starting your first job or closer to fifty and starting to think about retirement.  It is important to work with a Certified Financial Planning Professional®.

The Certified Financial Planning Professional® will help you to make the most out of your Retirement Annuity whether starting a your first retirement annuity investment or at retirement, with a tax efficient draw down strategy.