Is there any type of investment – with tax benefits similar to a retirement annuity – which allows you to cash in whenever you want?
A retirement annuity has always been the preferred way to get something back from the taxman. It still is…if you earn enough to have a tax problem.
But one of the reasons why many people don’t invest in one is because you can’t touch your money until you turn 55 (or become disabled, die, or suffer from ill health).
And even if you retire, become disabled or suffer from ill-health, you can’t get your hands on more than one-third of it. That’s unless the entire investment is worth less than R247,500 in which case you can take the entire amount in cash. Both the one-third taken in cash, and the annuity income taken from the remaining two-thirds, may attract tax.
The only other time you can cash in your retirement annuity, is if you formally emigrate or leave South Africa upon the expiry of your work visa. Yes you’re allowed to cash in your investment but not before paying the tax.