Are you interested to learn about the Absa retirement annuity in South Africa? Then check out this guide.
This investment account is suitable as a top-up to a pension fund.
The account allows you to build an investment portfolio that caters to your specific needs and is ideal for you if you are employed and want to make additional provisions for retirement.
We will first show you the cost of this product.
What Is The Cost
The minimum recurring investment is R500, and the minimum lump sum investment is R25 000.
For the first R250 000 investment, you are charged an annual administration fee of 0.75%.
For the next R500 000 investment, you are charged a 0.50% annual administration fee.
For investments above R750 000, you are charged a 0.25% administration fee.
The maximum adviser fee per product is 1.00% per year for independent advisers and Absa advisers.
This is the cost of Absa’s retirement annuity in South Africa.
Absa Retirement Annuity
You can invest monthly with a debit order from R500 or a lump sum investment of R25 000.
You can add to your investment anytime you want.
Transparency is key to this account, and you can get quarterly reports on your portfolio holdings, values, and transactions.
You are flexible in choosing the underlying investments from CIS, ETFs, wrapping funds, and share portfolios.
You can transfer money from an existing retirement annuity to your Absa portfolio with no tax charges.
When you retire, you can take up to one-third of the investment amount as a cash lump sum, and you can use the balance to purchase an income-paying investment that will provide regular payments.
You can withdraw the total amount if your account balance is less than R247 500.
Payments are made to your beneficiaries in the event of death.
This is how the Absa retirement annuity works in South Africa.
What Is The Tax Implications Of Absa Retirement Annuity In South Africa
All the contributions are taxed up to 27.5% of whichever is higher between the gross remuneration or taxable income.
Investment returns like dividends, income, and capital gains are not taxed.
The investment value taken at retirement might be liable for tax.
The amount used to purchase a compulsory annuity-paying product is only taxed on income payments.
This is all you need to know about Absa’s retirement annuity in South Africa.