Question:
Can you tell me whether the new generation retirement annuities are more cost effective or not. Lot's of clients are considering section 14 transfers from old retirement annuities to the new generation plans even with the transfer penalties? Is this really in their best interests?
Answer:
Les, Apologies for the late response. We cannot make a blanket comment on that, but without a doubt, some new age RA's are a lot cheaper than policy based RA's, esp. if they allow you to invest direct (without the use of a broker) and they use index (passive) investing. In most cases, the cost savings more than offset the 'termination penalty'. Please read our blog on this subject to find out why this is so: https://www.10x.co.za/blog/understanding-the-ra-termination-charge/
