Question:
Hello , Firstly , thank you for providing this platform to ask questions . I have a retirement annuity that matures later this year , amount is around R600,000 . I am 60 and still employed with a provident fund at work . What should I do with the retirement annuity in the meantime .I will retire at 65 . Thanks in advance .
Answer:
Roy, You have a number of options. Firstly, you can cash in your retirement annuity, in which case you would have to buy an annuity (living or guaranteed) with at least R400 000. If you are still working, you may not need this annuity income, plus it will be taxed at your highest marginal tax rate, so this is not ideal. Secondly, you can leave the retirement annuity as is. You do not have to withdraw simply because it has reached maturity date. You can make it paid up, or you can keep contributing even beyond maturity date. Thirdly, you can transfer the retirement annuity to another provider, if you believe they will provide you with a better return, or lower fees.
