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Hi all

Im hoping someone can advise on how to invest in a retirement annuity, as well as touch on the benefits of retirement annuity vs investing in equities.

Questions:
Do I need to use a broker to invest in a RA? I understand that depending on the product one invests in (life or unit trust) there is a monthly or upfront broker commission involved. Assuming I can invest without a broker would I save on this commission?

I understand that there is a significant tax benefit to a RA but also understand that funds can not be withdrawn without a penalty before the age of 55 unless I immigrate. Are there any other benefits/limitations I should be aware of?

Assuming I do invest in an RA, should all of my disposable income go into this or is it better to split this into RA and equities?

Thanks in advance.

Ja nee, RA's, annuities, endowements. All created for sucking money out of the masses and turning us all into sheep. Making us think its the only way to do it. Granted, for the majority of the masses its a way to force us to save for our retirements somewhat as most wouldnt if they werent available even though most still dont, but continue to blow their hard earned on crap nonetheless, and blame the world, government and society for their own short comings rather than taking responsibilty and trying to learn about other methods.

I know in the UK, they have retirement wrappers, which enables the more savvy ones to self invest in instruments to manage and grow the portfolio for retirement oneself, but are heavily penalised tax wise if with drawing prior to retirement.

Would be great if we in SA had a vehicle to do that for the less disciplined yet still want to have control over managing it themself and avoiding the fees we get charged here on these products.

Having said this, does anyone know of a method to convince your employer that you dont want to contribute to the pension or provident fund?

Thanks guys, all the contributions have made for interesting reading. For now, Im staying away from RAs.

As it so happens, I just shredded a Sanlam policy yesterday that I found in one of my drawers. After 20 years it would have paid out in 2015 the massive amount of........... R16 000. Luckily I bought it off years ago.

I want to share a secret with you guys. Actuaries are the soothsayers of the financial industry. I have seen those okes in action. They plot data (inflation, interest rates, you name it) into databases and then run predictions on the data. Believe me if I tell you that the insurance industry does not release a product that have not been tested in every scenario possible and the insurance company always, always come out tops. I have seen a computer run for 2 weeks non stop testing a scenario. Sometimes the scenario is so complicated, it literally bombs out corrupting the data. These okes don't just do it for SA companies. They do it for UK companies also. For them we are cheap labor so they pass a lot of that kind of work to us.

In a nutshell, when an insurance company release a product for sale, they know exactly what the outcome will be.

Have you heard of this? I stumbled across it accidently today.

Initially, it seemed only available in US but then I found out Nedbank offers a product like this. However, I want to avoid the big banks because they are all owned by insurance companies anyway, so I kept searching. So here's an independent option where you can select everything online: https://www.sipp.co.za

Once I've signed-up I will share some feedback with you.