WHY INVEST IN A

RETIREMENT
ANNUITY?

? WHAT IS A RETIREMENT ANNUITY?

Simply put, a Retirement Annuity or also known as
an RA, is tax-effective retirement investment, that is WHY SAVE IN A RETIREMENT ANNUITY?
designed for individuals who want to save towards
their retirement. Once you reach retirement age which A retirement annuity is the perfect retirement savings
is 55 or the end of the contract term, 1/3rd gets paid to vehicle if you are self employed or as a top-up to your
you tax free as a lump sum and the 2/3rds is used to company’s pension or provident fund.
purchase a life or living annuity that provides you with
a taxable income.

MAX RETIREMENT ANNUITY BENEFITS

02 04 06

The You can add Job change

investment beneficiaries withdrawal
growth within to you RA benefits can be
v the plan is not investment. added tax-free
01 taxed. 03 05 to your annuity. 07

All contributions Your Retirement Access to a wide The more you

made towards your Annuity is range of underlying invest, the lower
RA may be tax protected against investment funds your plan charges
deductible. (Up to claims from on the MAX will be as your
N$150 000 pa) creditors. platform. investment grows.

WHEN SHOULD YOU START If you save N$1 000 towards your retirement in
2043 (20 years) and you start today, you’ll save
SAVING FOR RETIREMENT? N$1 235 258. If you delay by one year, you’ll save
N$1 075 108. And if you delay by three years,
The best time to start saving for retirement was you’ll save just N$807 000. So, a delay by just
20 years ago. The second-best time is now. three years will cost you N$428 258!

WITH A MONTHLY RETIREMENT

N$
HOW DO YOU ANNUITY POLICY CONTRIBUTION
N$300 000 – N$12 000 = N$288 000 (taxable income)

SAVE ON TAX? N$9000 + (25% for each N$ above N$100 000)

N$9000 + (25% of N$188 000) = N$56 000)

v Assumptions:
WITHOUT A MONTHLY RETIREMENT
ANNUITY POLICY CONTRIBUTION
SALARY N$25 000 N$300 000 (taxable income)
N$9000 + (25% for each N$ above N$100 000)
N$9000 + (25% of N$200 000) = N$59 000
ANNUAL SALARY N$300 000

MONTHLY CONTRIBUTION N$1 000

N$3 000
YOU SAVE

ANNUAL CONTRIBUTION N$12 000

TAX RATE 25%

A YEAR ON TAX
(*Invested in a Balanced Fund with a return of 8% per annum)

DO GREAT THINGS EVERY DAY