Investment Linked Retirement Products
Retirement Annuities
Indequity Capital Managers offers Retirement products with the following objectives in mind: |
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To give individual investors who want to save for retirement or who want an annuity after retirement access to our investment management skills.
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To provide products which represent excellent value for money. We only earn a fee on investment management and do not earn any other income from these products.
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A retirement annuity encourages you to save for retirement by offering the following tax savings:
Contributions are tax deductible subject to a maximum of the greater of
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15% of your non-retirement funding income. Non-retirement funding income refers to that part of your taxable income that is not taken into account when calculating contributions made to a pension or provident fund by you or on your behalf by your employer. Variable income such as commission and bonuses is typically non-retirement funding; or |
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R 3 500 minus allowable pension fund contributions; or
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R 1 750.
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At retirement, accumulated capital in the retirement annuity taken as cash will be taxed based on a simplified sliding scale:
| - The first R300 000 will be tax-free, thereafter,
- R300 001 - R600 000 will be taxed at 18%;
- R600 001 - R900 000 thereafter will be taxed at 27%; - Lump sum amounts above R900 000 will be taxed at 36%. |
At least two thirds of the capital must be invested in a pension-providing vehicle such as a living annuity or a guaranteed life annuity. No tax is payable on the transfer into the living annuity. The annual pension received after retirement is taxed at your marginal tax rate. Your marginal tax rate after retirement is typically lower than your marginal tax rate before retirement.
The capital in a retirement annuity cannot be withdrawn prior to retirement.
(The above amounts and rates are based on the 2008 / 2009 tax year.)
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Living Annuities
- At retirement a living annuity is purchased with the pension benefits originating from your pension, provident, preservation or retirement annuity fund.
- The money in your living annuity can be invested in one or a combination of unit trust funds.
- A living annuity provides you with a regular income, which is funded by growth on capital and income from interest and dividends.
- Legislation requires that you withdraw between 2.5% and 17.5% annually of the capital in your living annuity.
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(The above amounts and rates are based on the 2008 / 2009 tax year.)
Discretionary Portfolio Services
The individual portfolio management service is a niche focussed service available to clients with a minimum investment sum of R5 million.
The service is tailored to each individual’s needs but will consist of a quarterly report and personal service.
The quarterly report is prepared for each individual investor and will include the performance, risk analysis, portfolio income, account transactions and also the investment strategy.
The fees for the above personalised investment service is market related and determined according to the value of the assets in the portfolio.
This service is unique and is done on a consulting / advisory basis or by means of a discretionary mandate.
All administration is undertaken on behalf of the client and cash and shares are kept with reputable institutions.
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