Question:
I have a Sanlam RA which only pays out when I’m 55. Is there absolutely no way I can withdraw my money now? Surely there must be a way? I'm 36 now and I need the money. It is after all MY money? Please help.
Answer:
Hi Isabel,
You are right, it is your money, but unfortunately you may not access your Sanlam RA until you are 55. This applies to all RAs. The reason is that this money is intended to help fund your retirement; in return for your foresight and savings discipline, you receive certain tax benefits: tax-free contributions (up to 15% of non-pensionable income), tax-free investment income on your fund savings and tax-free cash lump sum payments at retirement. But in return, the state locks up this money until you are at least 55, in the hope that you do not become a financial burden on society.
You can however still access your money earlier, in one of two ways: on formal emigration (you have to sign off with SARS), or in the event of serious ill-health (preventing you from working). Early termination may trigger a termination penalty, to recover upfront costs (mainly broker commission).
