Claudia Ishinda | Sanlamallianz Financial Adviser

< Back

Saving for retirement

Start saving now so that you have a steady income to look forward to when you retire.

BENEFITS

Why SanlamAllianz Retirement Annuity

Premiums from as little as N$350 per month
(depending on age)
Wealth Bonus payout at retirement with the Echo Retirement Annuity
Retirement savings expertly managed on your behalf
Option to remain invested after retirement

DEP-webpage-side-image-retirement-retired-couple-surfing.jpg

DEP-webpage-side-image-investments-grandfather-and-granddaughter-playing-with-toys.jpg

There’s an added bonus to staying on track

If you choose to save for your retirement with a Sanlam Echo Retirement Plan, we’ll reward your commitment with a Wealth Bonus – an additional sum of money that grows with every payment you make into your retirement annuity and is added to your retirement savings when you stop working. The longer you’re invested with Sanlam, the higher your Wealth Bonus will be.

PRODUCT SPECIFICS

Take a closer look at our retirement annuities

While Pension, provident funds and retirement annuities qualify for the same tax benefits in terms of the Income Tax Act, there are significant differences between them. Both pension and provident funds are offered by an employer – as a condition of employment – with you and your employer making monthly contributions to these funds.

Retirement annuities, on the other hand, are owned by the individual, meaning you’re free to contribute to one whether you’re self-employed or you already contribute to a pension or provident fund. They also typically offer wider investment fund choices than either of the other two funds.

According to current tax legislation, and depending on your tax situation, retirement annuities offer valuable tax benefits. You pay less tax. When you pay into a retirement annuity, you’re permitted to deduct your monthly contribution from your taxable income.

This means you’re taxed on less of your income, which translates into less tax. The growth on your investment is tax-free. The investment returns earned in a retirement annuity fund are not currently taxed.

It’s important when saving for retirement to have an investment strategy that lines up with your goals, appetite for risk, and planned retirement age – regardless of what’s happening in the markets. Avoid making hasty decisions driven by fear and take advantage of volatile markets with an investment product that requires regular contributions – this allows you to buy more units when the market is down and get ahead when things start to improve.

Lastly, aim to manage times of uncertainty with proper financial planning and remember that saving for retirement is a long-term strategy requiring patience and persistence – as the saying goes, ‘It’s not about timing the market, but about time in the market.’

Depending on your retirement plans, you’re likely to need at least 75% of your final pre-tax salary after retirement – bear in mind that some of your expenses will fall away once you stop working and you’ll pay less tax after 65 and even less after 75. What this means is that you’ll need to have saved at least 15 x your final annual salary in order to retire comfortably. This can be broken down over time to give you a sense of whether or not you are on track.

5 years – 1 x your annual salary
10 years – 2 x your annual salary
20 years – 5 x your annual salary
30 years – 10 x your annual salary
40 years – 15 x your annual salary

You may withdraw your retirement savings from your SanlamAllianz Retirement Annuity at any point after you turn 55. Early retirement due to ill-health or disability is treated in exactly the same way as a normal retirement. According to current legislation, up to one-third of your retirement benefit may be taken as a lump sum, which may be subject to tax. Your remaining savings must be transferred to a post-retirement income-generating solution where they will be used to provide regular pension payments.

The total value of your savings at retirement will be equal to the sum of the value of your investment in each underlying investment fund, less the transaction charge, if applicable. The value of your investment in each investment fund is calculated as follows: the number of units you have in the fund multiplied by the unit price of the fund at the calculation date. Your SanlamAllianz Wealth Bonus (a feature of the Sanlam Echo Retirement Annuity) will also be paid out to you at retirement. If you retire early, the Wealth Bonus that is added to the fund value will be lower than it would have been if you had invested until your planned retirement date.