Question:
Hi, I am currently self-employed and will never work for a company again. Can I transfer my preservation fund to a retirement annuity? The preservation fund is with 10X and the retirement annuity is an Old Mutual RA And, if so, how long does it take to transfer the funds? Thanks
Answer:
Althea,
Yes, you can transfer your 10X preservation fund to an Old Mutual RA. Be aware though that once you have transferred this money across, you can only access it from age 55 onward; in a preservation fund you will be allowed one full or partial withdrawal before age 55.
Also, before you transfer, make sure to compare fees on the two products. Fees have a dramatic impact on your long-term savings outcome yet paying higher fees will not guarantee you a higher investment return. Life-company RAs are typically very expensive (fees above 2% pa) and many have confiscatory penalties. Your 10X fee (either in the 10X Preservation fund or the 10X RA) will be less than 1% pa; the 10X RA also does not have a confiscatory penalties if you make it paid up.
Please refer to https://www.10x.co.za/why-10x/10x-solution/fees for more information on the fee impact.
