Question:
I want to cash in my Liberty Life RA. I want to know if it is possible and, I also want to know what the units mean in my policy - is it worth any money? Thank you
Answer:
Sebastian, Unless your paid-up RA value is less than R7,000, you cannot claim this money until you turn 55. You can make your RA paid-up (stop contributing) but you may then incur an early termination charge. The units refer to the number of units you hold in the RA fund. These units have a price that changes with the underlying value of your investment. If you multiply your number of units by the current market value of these units, you will know the value of your investment. You gain units when your contribute more money, you lose units when the service provider deducts fees for administration and other expenses. This methodology obscures what is really happening to your investment, what returns you are earning and what fees your are paying. The industry likes it that way. The less you understand, the fewer questions you can ask, and the more the industry can get away with. On a 10X RA statement, you see your opening and closing balance, as well as your return earned and fees deducted, both as a percentage and as a rand amount. So you know exactly what is going on with your money. But then our fees are very low, so we are not embarrassed to show them....
