Absa Retirement Annuity
29 November 2018
Planning for retirement is generally put on the back burner as it is much easier to only think about the present. The unfortunate reality is that sustaining one’s lifestyle through the years of retirement is impossible without long-term planning during one's income-generating years. Coming up with an effective plan on how to generate income for the years of retirement should not be a concern. For existing and potential clients, Absa offers a retirement annuity fund which allows for flexibility of payments, and even more enticing- these contributions are tax deductible. An added advantage is that if topped up before the end of the tax year (28 February 2019), the investor will receive a tax benefit for contributions made prior to the deadline. What more do you need? This product turns tax into a tax refund.
At the point of retirement, the investor can take a third of the investment as a lump sum (subject to tax) and the rest of the money should be used to purchase a retirement product which pays recurring income for one’s retirement years. Should the full amount be lower than R245 500, a full withdrawal can be made. Retirement no longer holds negative connotations.
The retirement annuity range allows the investor to pick from a range of local Collective Investment Scheme (CIS) Fund options, Wrap Funds, Personal share portfolios, and JSE listed Exchange Traded Funds (ETFs). All the options are available on the Absa Linked Investments (AIMS) platform. Absa offers a wide variety of options in order to cater to a wide spectrum of risk profiles. Whether one is a conservative investor, looking for cash and income solutions or one is a more aggressive market participant, looking for products in the equity range, there is a product suitable to one’s needs. Future planning meeting you at your comfort levels.
The idea of getting a tax refund for adding funds to one’s retirement annuity is extremely attractive. It basically means that one will be getting paid for saving for one’s own retirement. For those who do not have a retirement product, this is a chance to invest and get the most out of it. This is a case of investments created to give the maximum benefit to the individual, giving one the best output for one’s savings.
Who is the Absa Retirement Annuity Fund suitable for?
- Self-employed individuals
- Individuals needing to supplement an existing pension or provident fund
- Individuals wanting to reduce their tax liability
- Individuals with proceeds to be paid to beneficiaries after death
How does investing work?
One can invest monthly via debit order of R500 or more, alternatively, one can also make an R25 000 lump sum payment. The fund allows for top-ups at any time and of any amounts. Quarterly reports are sent to investors, giving the portfolio holdings, values, transactions and fees. The flexibility of choosing underlying investments allows one to tailor make a portfolio and track it quarterly to see how it performs. One can also transfer funds from any retirement annuity vehicle to Absa with no taxes. Saving for retirement made simple.
In order to take up or top up before 28 February 2019, email firstname.lastname@example.org or call 0800 000 005 for more information.
Read more about the annuity here.
Tsitsi Hatendi-Matika is Head: Retail Investment Specialist at Absa’s Wealth and Investment Management unit.
Disclaimer: The advice contained on this blog is for general purposes only and does not take into account individual circumstances, objectives or financial needs. Accordingly, readers are advised to seek appropriate advice from licensed professionals prior to making any investment, or taking up a financial product or service.