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Retirement Annuities

Investing for retirement through a Retirement Annuity (RA)
With the end of the tax year approaching, now is the perfect time to maximise your taxdeductible contributions towards a retirement annuity and explore how this highly taxefficient retirement funding vehicle works.

What is a retirement annuity?
Retirement annuities is an investment tool specifically designed for individual investors who want to save for retirement in a taxefficient manner. A retirement annuity is a savings vehicle which allows a
client to contribute on a regular basis, and the money accumulates in the investment portions that they select. The aim is for he funds to grow as much as possible to enable a higher income during retirement.

Two types of broad annuity products used to provide an income during retirement.

Living annuities

Living annuities are marketrelated investments designed to give clients a fixed retirement income, while concurrently aiming to grow their retirement savings. A small fraction is withdrawn from their retirement savings each month to provide them with a regular income. The market value of the
living annuity will differ, which is determined on the performance of the underlying investment portfolios and the level of income that is withdrawn each month.

Life annuities

Life annuities pay a regular income for life to the client, protecting them against market fluctuations. The insurer assures that the income you receive will never reduce for as long as you live. This type of annuity is typically ideal to match one’s basic life expenses such as medical costs, groceries, and
other regular essential spending.

Benefits of Retirement annuities


Your creditors do not have access to your retirement annuity if you become insolvent. Noone, except you or your selected dependents, should you pass on, can have access to your funds. Your savings will only be available when they are most needed and at the time intended: your retirement

Should you pass away, your beneficiaries can decide to either receive a share of your RA as a cash lump sum or as an annuity, or a combination of the two. The annuity income will be taxed according to the current income tax table.

Diversified portfolio

Having a RA gives your investment access to different asset classes and geographical regions. One can select from a variety of investment funds that are managed by leading fund managers.

Tax Savings

Your retirement annuity contributions reduce your taxable income up to certain limits: part of your contributions come from tax savings, which means that the South African Revenue Services (SARS) is actually paying a part of your retirement savings. Another big tax advantage is that the growth on your investment is tax free.

Boost your retirement savings
Few people save sufficiently through an employer offered retirement fund to allow them to retire comfortably. A retirement annuity can boost your other retirement savings to ensure that you’re able to maintain your standard of living in retirement. When you retire, you will most likely have to continue funding your expenses such as medical aid, insurance, rates, and taxes etc. A retirement annuity can help you meet these expenses.

At Morebo, we are invested in your retirement goals. This means that no matter where you are in your retirement journey, our range of preand postretirement solutions, combined with sound advice from our Financial Advisers can help you achieve your retirement goals. We also have a range
of investment strategies to suit different goals giving you the option to tailormake solutions to help you achieve your financial independence in retirement.


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Morebo Financial Solutions (Pty) Ltd, an affiliate of Liberty, the Liberty Group Ltd is an authorised Financial Services Provider in terms of the FAIS Act. (No. 2409)
Morebo Wealth (Pty) Ltd, an affiliate of Liberty, the Liberty Group Ltd is an authorised Financial Services Provider in terms of the FAIS Act (no. 2409)
Morebo Brokerage (Pty) Ltd is an Authorised Financial Services Provider in terms of the FAIS Act (no. 48360)

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