A retirement annuity is an alternative to a pension fund for individuals that want to provide for their own retirement.
You can deduct contributions you make to a retirement annuity from your taxable income, up to the greatest of: 15% of your non-retirement funding income; or R 1,750; or R3,500 less current pension fund contributions. If your employer does not have a pension or provident fund, you will therefore be able to deduct contributions of 15% of your income from your taxable income.
At retirement, you can take up to one-third of the proceeds in cash. The rest must be used to purchase an annuity income.
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