FUND FOCUS

DO YOU HAVE A PLAN FOR RETIREMENT?

Article by Satrix Investments

WHY INVEST IN THE SATRIX RETIREMENT PLAN?

We all know we must save for retirement, and we have many excuses why we can’t do it right now - but the sooner you start, the sooner your money will grow. You’ll need many, many years of saving to accumulate enough money to sustain you financially during the years when you don’t work anymore. Retirement funds are set up to assist you for this kind of saving.

The Satrix Retirement Plan (SRP) is a retirement annuity, a savings vehicle designed specifically for you to save for retirement. Prior to retirement and while you are still contributing to the SRP, you will receive an income tax saving up to a certain limit on the amounts you contribute.

Once you reach age 55 you have the option to ‘retire’ from the retirement annuity. You can then take up to one third of the money you have saved as a lump sum in cash (subject to taxation) and the rest you must use to purchase a compulsory annuity which will pay you an income every month, quarter or year, whichever you prefer. Remember, you don’t have to stop working at age 55 to start receiving this income; it could provide you with a passive income should you want to simply scale down your work hours or start your own business. You don’t have to retire from your work to retire from this investment product.

When you turn 55, you can also choose to not touch your retirement savings and continue contributing or saving until you are ready to retire.

HOW MUCH CAN I CONTRIBUTE?

The SRP is available on SatrixNOW which means there are no minimums, you can start with any amount that works for you. It also means you have no excuse to NOT start saving today.

Pre-retirement you can contribute as much as you like, but not all of your contributions may be used to reduce your tax bill. SARS sets the limit up to which you enjoy tax relief  at 27.5% of your taxable income, capped at R350 000 per tax year. This will reduce the actual income tax you pay each year, i.e. there’s more money in your wallet each month (remember to tell your payroll administrator about your contributions).

The no fuss way to save for retirement is to set up a recurring investment each month. This way you don’t need to think about it again. You can also invest ad hoc amounts or a lump sum whenever you like.


WHERE DO I INVEST MY MONEY?

All retirement investments must adhere to Regulation 28 of the Pension Fund Act. Regulation 28 stipulates how your money can be invested, ie how much can be allocated across different asset classes. Satrix has two unit trust funds managed within the limitations of Regulation 28 which are available for selection as the underlying investment in your Satrix Retirement Plan.

The Satrix Balanced Index Fund - view MDD

The Satrix Low Equity Balanced Index Fund - view MDD

You will need to choose one of these two unit trust funds (or a combination) for your Satrix Retirement Plan investment:

WHO SHOULD INVEST?

  • If you are self-employed, the SRP is perfect for you – especially if you do not belong to a pension or provident fund.
  • You wish to supplement existing retirement savings as you feel it may not be enough.
  • You receive additional income which is not taken into account when contributing to an existing pension or provident fund.
  • You are looking for a tax-efficient way to save for retirement or your financial freedom.


HOW TO GET STARTED

Existing SatrixNOW clients can simply login and add the Retirement Plan to their account. 

New investors can register a SatrixNOW account here. 

Download the SatrixNOW app for even easier access!


POSTED : 21 APRIL 2021

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