Retirement Annuity FAQ
Can my employer contribute to a retirement annuity on my behalf?
Yes. The employer can either contribute to the RA on the member’s behalf, or deduct such contributions from the employee’s pay. If the employer makes the contribution on behalf of the employee then this will attract fringe benefits tax that must be recovered from the employee. In both cases, the employee can claim these RA contributions for tax, up to a maximum of 27,5% of gross remuneration or taxable income (whichever is the higher) subject to an annual deduction cap of R350,000.
What is a retirement annuity?
A retirement annuity (RA) is a retirement fund in terms of the Pension Funds Act. It is a tax-effective investment vehicle designed for individual investors (as opposed to employees who contribute to a workplace retirement fund). A retirement annuity is ideal for people who:- are self-employed;- don’t have access to a work-place pension or provident fund through their employer;- want to supplement their pension or provident fund savings;- earn significant amounts of non-pensionable income (e.g. interest and renta...
Are retirement annuities effective as estate planning tools?
I have read that Retirement Annuities are also very effective estate planning tools. The proceeds are exempt from estate duty, capital gains tax and executor fees because the cash amount can be paid directly to the beneficiaries if they exercise this option. What must I do to confirm this specific option is exercised?
What is the tax treatment of arrear and excess contributions?
I am considering a new retirement annuity with 10X, but I am confused by the terminology regarding the tax treatment and definition of “arrear” vs “excess” retirement annuity contributions. Am I correct in assuming that I can claim up to R1 800 p.a. as “arrear contributions” for those past years when I did not contribute the maximum tax free amount to my retirement annuity and that I can carry over R1 800 p.a. until such time as I have used up all of my arrear retirement annuity tax free allowances not used in the pas...
What are the similarities between the Sanlam and Old Mutual RA's?
list a few similarities between sanlam and old mutuals retirement annuity policy
