Retire from Retirement Annuity

Nowadays, regardless of your contractual retirement date on your retirement annuity, you are allowed to retire from your retirement annuity when you are 55 years old or older. However, you should take note that if your retirement annuity have not yet reached the contractual retirement date, penalties could be levied against fund for costs not yet retrieved. In the event of a member becoming totally incapacitated due to sickness, accident, injury or infirmity of mind, the trustees of a retirement annuity fund policy may decide to allow the member to take early ill-health retirement before the age of 55. In this case, the member retires in the normal way and becomes a pensioner. When a member dies the benefits paid will be taxed according to the retirement tax calculator.

How does retirement from a retirement annuity work:

When retiring from a retirement annuity, one third of the proceeds may be taken as a lump sum. To receive the one third as a lump sum you’ll have to be in good standing with SARS as a tax directive is requested by the insurer from SARS and the lump sum can’t be paid out to you if clearance is not obtained from SARS. The rest of your proceeds, the remaining two thirds, must be used to buy an annuity (pension) from an insurance company to supply you with a monthly income. (Currently if the total value of your retirement fund does not exceed R 75 000, the total value can be received as a lump sum) 

How the experienced RA Direct brokers can assist you:

The experienced RA Direct brokers will get your retirement annuity information from insurers and inform you of your value/s and options; If instructed to, we will facilitate all the administrative functions and communications with the insurer to have your one third paid out to you; Advise you on your annuity options available to you and if applicable find a rate that is compatible with your unique circumstances. It is important to note that you don’t have to purchase your annuity income from the insurer where your retirement annuity was held, but that you are free to shop around to find a better rate.)

Benefits of using RA Direct:

By utilising the technology the RA Direct brokers can speed up the process of requesting your retirement from your insurers fund/s and keep the costs normally associated with these transactions as low as possible. With RA Directs fee-for-service approach you will enjoy a saving compared to traditional fees and this saving will result in you having more money left to buy the compulsory annuity with the resulting increase in annuity income being paid monthly.
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Retire from Retirement Annuity

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