Are retirement annuities necessary?

As we near the end of the tax year, retirement annuities to come to the fore as taxpayers rush to top up their contributions to receive the applicable tax deductions.

But is a retirement annuity the best option? Yes, but only if it is possible to get a reduction in your tax liability for that year. If it is not advantageous from a taxation point of view rather invest the money in a discretionary investment such as a unit trust. There may be no tax advantage but at least the money is accessible whenever you may need it. One cannot utilise the money invested in an RA before the age of 55 (and no later than age 70) so why have one's money tied up if there is no tax advantage in the first place?

Money invested in a retirement annuity is specifically intended for one's retirement and should be utilized accordingly. Silke Financial Services has the experience, skill & knowledge to guide your investment-making decisions in the most appropriate manner.

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If you have any queries regarding the above commentary please contact us on 021 683 3380 or info@silke.co.za.