Should You REALLY Be Investing In A Retirement Annuity In South Africa?
Вставка
- Опубліковано 28 чер 2024
- 📆 Check Out My Service Offering As A Fee-Based, Independent, Lifestyle Financial Planner: my.profileme.app/pieterdevill...
So you’ve heard about RA’s, aka Retirement Annuities, and you know that they are highly recommended by financial advisors to invest in in order to make sure you can retire comfortably. But is a RA really a good option? What exactly is lurking underneath the glamorous “Tax Savings” that gets promoted everywhere?
Retirement annuities in South Africa have quickly become one of the most controversial topics, especially amongst the more experienced investors. So in today’s video, I am going to break open and analyze exactly what the benefits and concerns of a RA are, and at the end, I will give you my personal verdict and recommendation on whether or not you should consider investing in a RA based on my own conclusion.
So if you want to start investing in a RA or if you are already invested in one but you are unsure if you should continue, then make sure to watch this video all the way to the end so that you can make your own, unbiased, informed decision. And by the way, when I talk about Retirement Annuities in this video, I am also talking about pension and provident funds, as they are all essentially the same thing. Okay, so let’s klap it!
UA-cam Chapters:
00:00 Introduction
01:31 Benefits of a Retirement Annuity in South Africa
01:45 Benefit 1
03:09 Benefit 2
03:50 Benefit 3
04:08 Benefit 4
05:30 Benefit 5
07:33 Benefit 6
08:36 Drawbacks of a Retirement Annuity in South Africa
08:45 Drawback 1
11:08 Drawback 2
12:28 Drawback 3
13:22 Drawback 4
13:55 Final Verdict
Here are the links to the articles mentioned in this video:
Tax savings on lower-income calculation: bit.ly/3v1CcBZ
Retirement Annuity calculator: www.mymoneytree.co.za/ra
________________________________________
My Product Recommendations: 👇
📚 Download My FREE eBook Containing 200+ Money Saving Life Hacks: moneymarx.ck.page/guide
🎥 All the gear I use to make my UA-cam Videos: kit.co/MoneyMarx
________________________________________
✅ Follow me on Social Media 👉
Website: my.profileme.app/pieterdevill...
Instagram: / mrmoneymarx
TikTok: / mrmoneymarx
Twitter: / money__marx
Facebook: / mrmoneymarx
LinkedIn: / drpieterdevilliers
For business inquiries: moneymarx101@gmail.com
#PersonalFinance #Investing #Southafricanyoutuber
________________________________________
My name is Dr. Pieter Marx de Villiers, and I'm a Veterinarian turned Financial Advisor from South Africa who aims to retire by the age of 35. Follow me in my journey towards Financial Freedom in (hopefully) just 10 years! :)
This channel will help you achieve your Personal Financial Goals through the things I’ve learned and researched to improve my own Financial Health.
If you enjoy the content and find any value in my videos, consider Subscribing and help me reach my goal of 30 000 Subscribers on UA-cam in 2024!
Lekker!
________________________________________
DISCLAIMER
Whilst I am a Registered Financial Advisor under the FSCA as of June 2023, the content on this UA-cam Channel and all of my other Social Media Platforms are for Educational Purposes only and should not be taken for Financial Advice. You and only you are responsible for your financial decisions and must therefore conduct your own research and seek the advice of a licensed Financial Advisor where necessary.
Some of the links on this page are affiliate links, meaning, at no additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. Affiliate commissions help fund videos like this one.
This is excellent content. Such a well prepared script, keep up the quality Pieter.
Thanks Kane. I really appreciate that! :)
Only reason I invest in an RA is because my company matches my investment each month up to R1 000. A immediate return of 100 percent just too good to pass up
Excellent explanation. A 25 year old must go for lowest cost and max risk using 25% property limit, 45 % offshore (high growth counties and sectors) and 75% equities and no fixed income. See the low cost Nedgroup Core Accelarated fund if you do not have time to select specialist funds. As an Investment advisor I also make use of Section 10C (tax treatment of excess contributions) to get the tax rate on annuity income to 0%.
Thanks Jannie! I actually need to do some research on the best low cost passive Unit Trusts, so I will definitely look onto the Nedgroup one.
Can you please eloborate on Section 10C and how you utilize it?
Excellent video... Took a boring topic that everyone overlooks until its too late and added a fun spin to it. Good on you bud.
Appreciated bro
Love from Namibia
Great video! I agree that an RA should be only a part of your planning for retirement rather than your entire retirement plan. The tax savings are great though and a potential contribution from your employer increases the appeal. My company has recently changed their policy to match our RA contribution up until a certain %. This guarantees a 100% return on investment which makes it even more appealing.
Hay Lani. Yes if you can get an employers match on your Pension contribution then it is a no brainer as that is an immediate guaranteed 100% ROI! I unfortunately don't have that at the moment, but if I had it available then I would definitely go for it :)
I think I will still invest in RA. Your presentations are AMAZING! your tone and clear topic transitions (written advantages and disadvantages) help to keep up with the information. Its less overwhelming that way. Thank you Peter.
Thank you for the well researched and considered advice.
Thanks for watching Ron :)
🙏🏿Keep up the good work man. Top tier quality videos really learnt a lot.
Thanks Trinity! Glad you found it helpful. :)
Love video doesn’t have enough exposure😢 it’s So great and informative! Would love a video explaining Direct offshore investments and which bank or company is best to do it with ❤
Thans Edith! I really appreciate it! :) I do have a playlist on offshore investing on my channel that you can check out where I give full tutorials on how to do it :)
Thank you for this
My pleasure! :)
Much appreciated 👌👌👌👊
Only a pleasure Tebogo :)
Hi MoneyMarx.. I have been going through your videos for sometime now, trying to figure out if I should invest in an RA or Vangard total world in the usd account, all this with the easy equities account. I’m just not sure which one I should go with in terms of fees and tax implications. I already have provident fund with the company I’m with and would like to add on what I already have. Just not sure how I will be taxed with usd account compared to an RA. The RA I’m looking at is the unit trust with easy equities within an the RA account and the USD etf is the vangard total world and snp 500. Looking forward to your advice.
Thank you for this! You mentioned investing in Irish based ETF’s. Would you kindly elaborate more on this, please? The why’s and how and examples of where and how to find these etf’s? Your input is highly valued
Me too - anxious to know!
Groete Pieter...Peter hier👌👌👌
Hi Pieter, I am 60 years old and while still working will be shopping soon for life annuity. There are many offerings out there but since not all sites provide calculators it's difficult for me to compare them. Have you come across a life annuity which you could recommend or do you know of some site which does have that kind of info. All I need is which annuity pays the highest pension in exchange for X amount of money.
Thank you for the advice! Re the estate duty example, do you only pay estate duty tax it your net worth is R3.5m+?
Hey Vince. Yes there are certain allowable deductions and an abatement of R 3.5 million that will be subtracted from your estate and then only the balance will be liable for estate duty tax. These tax rules get a bit complicated as it is more specialized, hence why executors are needed to handle it correctly, but the example I used in the video of R 1 million is just to keep the maths simple. But in retrospect I should have mentioned the abatement. Thanks for pointing it out :)
Hey guys just to add on that the way I understand it is that if your estate is below R3.5M then no estate duty is payable and if it is above then estate duty is at 20% , please correct me if I am wrong
Thank you for the great informative video. I want to cancel my RA and invest in stocks/ shares...is it a good idea?
Only a pleasure man :). An RA and TFSA are both still great investments for retirement, as long as you don't pay excessive fees on it. If you want to invest in individual stocks/shares, you really need to do a lot of research and lnow what you are doing. If you are still a beginner, rather buy ETFs as they are less risky and more diversified :)
How do you calculate the effective annual cost % of an RAF? Is it the annual fees divided by opening or closing market value of the fund? I've tried to calculate my % but I don't get a consistent % for different periods. My advisor has said that my EAC is 0.8% plus vat but I would like to actually check the calculation using my annual statement which shows the annual cost/fees.
Hey CB. There are quite a lot of things that go into calculating the EAC of a fund, so I would recommend you go check out this video of mine. It is a long one, but I go into detail to explain all the fees you need to know when it comes to investing as well as how the EAC can be calculated: ua-cam.com/video/2m4D2sfR6Qg/v-deo.html
@@MoneyMarx Ok I will do. Thanks very much.
@@CB-vw1je Only a pleasure :)
❤🔥❤️
Hey bro, did you do your CCS in Vaal with Rochelle ?
Hey Athenkosi. Jip that's correct :)
@@MoneyMarx yo bro how are you?
I have RA with Old mutual and i want to move it. Is it possible or i should open another RA on another investment company?
Hey Thotyelwa. Yes you can move it, but it needs to be done using what is called a Section 14 transfer. You can ask the company to who you want to move to initiate the process and they will take care of the paperwork. You can also just open a new RA with the new company and stop contributing to the old one, but it really depends on the rule structure of your current RA as some providers will charge a penalty if you stop contributing or if you move. So you will have to weigh the benefit of moving against the cost og moving to make an informed decision. :)
I contacted Sygnia and they sent me some documentation concerning retirement annuity. i couldnt understand anything on those documents. a video on which options work would help
I’m not convinced that an RA with tax benefit is better than investing and playing around with equities. RA has very low growth.
Their dirty little fingers..🤣...😉.
;)