What is a retirement annuity? A retirement annuity, or an RA, is the most tax-efficient way to save for your retirement. Certain tax deductions are allowed on your contributions towards an RA. This could mean that your salary is taxed at a lower rate or SARS pays you some money at the end of the year. The other advantage of an RA - that no other investment product can beat - is that the returns on the RA are also not taxed. How do you invest in retirement annuities? There are two ways that you can invest into an RA. One is by means of a lump sum contribution. The second option is by setting up a monthly debit order. You can also transfer existing RA fund benefits to another RA, if your fund rules allow it. However, this is a bit more complicated and
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