Where To Invest Your RA In South Africa | Retirement Annuities In South Africa | Money Marx
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- Äas pĆidĂĄn 23. 07. 2024
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So, youâve started taking an interest in your own personal finance, and either decided to start investing for your retirement by means of a retirement annuity, or youâve been invested for a while in a RA, but you are not really happy to see how it performed over the past couple of years. You are now exploring all the different options available on the market whilst trying to navigate the absolute maze and spider web that is retirement annuities in South Africa.
If this is you, then this video will definitely be worth watching. I am going to strip down all the confusion and intricacies that are involved with RAâs, break them down into the simple parts that you need to understand and consider when taking out a RA and then compare the 4 best and cheapest RA options that are currently available on the market in South Africa so that you can make an informed decision. Guys. The decision you make in which retirement product you invest your lifetime savings can literally make or lose you millions of rands! So please take this seriously and watch this video all the way to the end as this will arguably be the most important financial decision you make in your whole life!
When it comes to investments, there are MANY things that are completely out of our control. But the few things that we do have control over, such as which funds we choose to invest in and how much we are willing to pay, can literally make or break millions of rands in the long run. And when considering that RAâs are all limited under Regulation 28, meaning their returns will be more or less the same over the long run, the only thing you really need to worry about is the fees.
You really canât go wrong with any of these providers mentioned in this video. So spend some time to audit your own RA, compare that to what is available on the market, get professional help, and make an informed decision. Your future self will definitely thank you for it!
Here is a breakdown of the info covered in this video:
00:00 Introduction
01:22 Why You Should Care - Effect Of Fees On Your RA
04:02 Similarities Between All These RA's
07:46 10X Investments
11:55 Sygnia
16:08 Easy Equities
18:43 OUTvest
22:09 The Winner?
24:44 Should You Move Your RA?
26:52 How To Move Your RA?
27:55 Take Home Message
Here is a list of the links mentioned in this video:
10X Investments: tinyurl.com/2tzpsuba
Sygnia: tinyurl.com/sd423sc8
Easy Equities: tinyurl.com/5hdzsaue
OUTvest: tinyurl.com/3w8uvjwv
Calculator to see what effect fees have on your investments: tinyurl.com/y34udcfe
Calculator to see if it will make sense to switch your RA: tinyurl.com/bakba55b
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My name is Dr. Pieter Marx de Villiers, and I'm a Veterinarian turned Financial Advisor from South Africa who aims to retire by the age of 35. Follow me in my journey towards Financial Freedom in (hopefully) just 10 years! :)
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Hey guys, thanks for watching! Just one small correction, the OutAggressive Fund from OutVest is not Regulation 28 compliant, as it invests more than 30% offshore, sorry about that. The best fund from OutVest for a RA will thus be the OutModerate Index Fund, so just keep this in mind when comparing all your options :)
I know this video is 3 moths old, but the offshore allocation has been lifted to 45% now.
Great content, well done
This guy is a national treasure in South Africa, these are things we don't learn in school or even university. Dankie Pieter!
Please make an update on this video?đ
You're doing the Lord's work
Thanks Prince! That really means a lot to me. :)
Hey Mr MoneyMarx⊠you most probably have forgotten that u made this video. I already have provident fund with my employer and itâs with liberty, which o donât like. Trying to get something to add on to that but after going through the easy equities I noticed that the sygnia Skelton balanced 70 fund is only found under the zar account. Would it be wise to invest in the zar account most probably starting with R200 per month or would I rather invest that money in my tfsa account under the total world etf.
I was with liberty , EAC of 3%+ , no returns at all on my money. This was their unit trust based fund RA product. Moved over to 10X. Allot simpler to understand and I see my returns clearly. I just leave it their with no further contributions. I contribute now to my employer provident fund with Alex Forbes, EAC of around 1% more or less. The fund seems to have returned 8-9% annually since I joined 6 years ago in line with most providers discussed in this video. Theirs still allot of negative stigma attached to RAs etc but theirs also very few ways to decrease your PAYE tax liability legally. But great video! Thanks. Ps I just hope in 30-40 years time our RAs give us the returns we expect .
Thanks so much for the well researched material.
Thank you so much you made it so simple to understand đ
Excellent Presentation. Thank your đ
Thank you for an informative video. Much appreciated
What a champ. Baie dankie vir hierdie amazing videos van jou.
Absolutely wholesome thank you!
Asbonge Mlungu!!!! waydlala nkab yamiđ
We thank you good sir,very helpful advise.
Brilliant content as usual Pieter. I'm really glad that you see the need to say what you are doing and why. Just a note to some of your readers hesitant to move RA providers due to penalties etc. If they have a fairly long time horizon it most probably will be prudent to pay the penalties and move as the better returns and lower costs far outweigh these in the long run. However if someone is 55yrs or older you are allowed to convert the RA to a LA in which case you can still change service providers. There are some providers who will still want to impose penalties but this needs to be challenged.
BTW I have RAs with two of the providers you mention for about 9yrs now and not at all surprised by your findings. It is really great to find someone who says it like it is and not a load of generic theory with the standard response to see your "trusted" financial advisor.
My personal view for what it's worth is that you've cut out most of the noise for anyone wanting to take out an RA.
Hey Harold. Thank you so much for your insightful comment, I really appreciate it! I am planning on making a video where I will show how one can calculate and figure out if you should move your RA and pay the penalty or if you should just let it sit and pay the higher fees. But I agree, the longer you have left to invest the more likely it would make sense to move the RA and take the hit
@@MoneyMarx I think a spreadsheet to help someone needing to move to a better performing and more cost effective RA would be a great idea for many of your subscribers. I did the maths a long time ago and don't regret moving. At the time I took quite a knock but decision making is so much easier when one is armed with facts and figures.
Thank you so much Pieter for this video, it has really helped me a lot. I will have to transfer my RA from Old Mutual
thank you for doing the research and sharing its fruits with us!
Only a pleasure. Thanks for watching Max! :)
What a great video!!!
Thank you so much
You are so welcome Abdur! Thanks for watching :)
I love love this video...
Such great information....
Now I'm really thinking đ€
Thanks for watching Zepho. Investing in the right RA is probably one of the most important financial decisions one can make :)
This was SO helpful, thank you!
You're so welcome Bianca! :)
Excellent presentation Pieter, thank you for all the research you did and putting it together in an easy, clear, understandable manner that really helps anyone to have a better idea on investing, plus fees and crucial impact of fees on networth as time moves on . đ
Dankie Pieter. It is only today that I have a good enough grasp of it. đ
That's great to hear Deon!
Very informative! Everything I needed to know
Thanks for watching Didi. I'm glad you found it helpful. đ
Thank you for creating this type of content
Only a pleasure Andrea! Thanks for watching :)
Thanks Pieter
This is good information. I just realized I have made a mistake with my RA and it is a very expensive mistake. Moving is the best option now. Thank you!
Hey Ikanyeng. Better late than never. Luckily we have many options available to us nowadays, so moving to a better provider is easier than what it used to be. :)
Baie goeie vid, dankie!
Baie dankie :)
Thanks for the hard work..
It's only a pleasure Roza. Thank you for watching. :)
đđđYou are the best
thanks. awesome information
Glad it was helpful! :)
Thanks, this is a very comprehensive video, is it advisable to ever get into 2 different retirement annuities ? Like going for Sygnia as the main one and then using easy equities as the second one? Are there consequences for thtat?
Great videos , been looking at RA's and you should check out the recently launched FNB core balanced fund, would be interesting to hear your thoughts I cant find a eac but their tic is 0.39% with a annual of 0.30%
You doing a great job..... I'm currently catching up.... You really simply investments.
Thanks Sisa! The most important thing is just to get started. It is never too late to catch up :)
Nicely done
Thanks for watchin Pearl :)
GOOD CONTENT MARX
Thanks Lasbritz, I really do appreciate itđ
you champion !!
:)
I start working next year and this has been so helpful in my planning. Thanks Marx
Only a pleasure. I am glad it was helpful. :) You will save yourself SO much money if you do this right from the beginning.
You've done your homework! Just a bit extra if I may. I invested with 10X for long time (RA), now on LA. To clear 1 complaint. 10X not showing fees with VAT - if they average 1 - 1.2% better growth than other three - adding VAT still leaves them no 1 on returns! As far as an app for comms - 10X login gives you all you need and updates on your investment anywhere/anytime on phone or pc. Also, you can (on login page) switch portfolio between low/med/high eq within 45secs! You will see result and "new" portfolio on your account within 2-3 days (I did!). 2 free switches per year.
Lastly - Outvest don't offer LA (you need to go somewhere else when u retire and Sygnia can only offer 30% of your investment (LA) offshore. 10X International portfolio (LA) beats them all.
Hey Heinrich. Thanks for your input. You raise some valid points. I agree, if they do outperform the others even after taking fees into consideration they should be the clear choice. Its just impossible to predict if they will be able to continue with such outperformance in the future. And seeing that they don't have so much space to be different than other RAs, due to the constraints of Reg 28, the only thing I can control is the fees. And seeing that their fees are not as transparent as the others, they hurt the trust factor, at least for me. But overall I have heard that most 10X clients are really happy with the platform and customer service. I don't think one can go wrong with choosing either one of the 4 as they are all wayyyy better than the traditional, expensive, rigid RAs that are provided by insurance companies. For the purpose of this video, I wanted to rank them according to my criteria, and thus I am invested in Sygnia, but again, choosing either of the 4 will still be better than older generation RAs over the long run. :)
@@MoneyMarx spot-on! I also wandered off the point you were making by throwing in the LA (instead of sticking to RA - sorry). But eventually we will all move out of RA to LA (as the hair goes grey- sooner than you think). I'ts just sad Sygnia and outvest then falls out of the cart! You will most probably fall off your chair if you c what 10X (offshore portfolio) manage to do for their investors. Good luck with you videos! You helping a lot of youngsters.
Hi Pieter. Whatâs your take on the ETFSA RAâs in comparison to the ones youâve mentioned in your video. Thank you for the great content. Keep it coming
Hey Lucy. I will have to look into their RA offerings and then get back to you. But I am planning on making an updated video on the best RA's in South Africa, so I can possibly include them there if they fit the criteria. :)
Legend!
;)
very very helpful
Thanks Dudumah! Glad to hear that :)
Thank you so much
You're most welcome Oratilwe :)
Hey , whatâs the minimum contribution with Outvest?
Thank you for your content
Hey Peter .. would it be wise the invest the Sygnia skeleton balanced 70 fund under the easy equities zar account? I already have pension fund with my current employer and just want something to compliment that pension fund.
Hi. Great content happy to find south african financial advice. Took your advice and requested a breakdown of the fees. Not sure if I'm reading it correctly. Can they really be charging me 8%.
Hey Kuart. Thanks for watching. Yes it is unfortunately possible. Many of the old school RA's presented by Insurance companies can charge very high EAC's at the beginning. The idea is for the EAC to become cheaper the longer you remain invested with them, but most of the time you end up paying above 2/3% in the long run, which is too high. I am just providing financial education, not financial advice, so if you are considering moving to another provider rather consult a qualified independent financial advisor so that you can get proper guidance as to if the move will make sense or not as there are many other things to take into consideration as well.
Excellent resource, thanks!
Glad you enjoyed it! :)
This is a long shot, but Pieter, do you know whether it's possible to transfer RA from Namibia to an SA fund?
Hey Marx what do you think of Allan Gray RA
Hi,is the RA fund you mentioned on easy equities still available. I Do not see it on the platform anymore.
Thank you so much this was very informative but you didn't mention contribution amount for Outvest.
Hey Nonkulukeko. What contribution amount are you referring to? The minimum contribution amount per month required?
Please could you do a similar video for living annuities for the over 55's? I'm getting close to retirement and I don't want to compound the mistakes I've made with my RA's.
Hey Anthony. Sure, I am planning on comparing life and living annuities as well as what the best options for both are, so I will add these topics to my production list ;)
This is exactly what I needed. Thank you!
Glad it was helpful Charlotte. Thanks for watching :)
These are great but why are we not talking about the wealth booster and wealth bonus options available with Sanlam? Surely these even with high EAC fees( less than 2%), puts them at the top in terms of RA products. Am i getting it wrong?
Hi Pieter! Thank you so much for the video. Do you know if non-citizens can open up a RA? Iâm moving to South Africa from the USA (my spouse is South African). Iâll be eligible to apply for permanent residency and citizenship after I have lived in the country for several years.
Pieter, thank you do much for your videos they have been really helpful to my fincial journey and trying to figure out what the future holds. I am a freelance Actress in the Theatre business and I really wanna start working on my RA this year and I've signed up with Sygnia but am yet to deposit that initial R20000, hoping to do so before the year ends as I've been working on maxing out my TFSA first. I was wondering if you would be able to please do a step by step video on how to get to the fund that you're talking about on the Sygnia Alchemy sight because I'm only getting the option of applying for an RA but not that specific Skeleton Balanced 70 fund.
That is the minimum lump sum sis, you have an option to deposit R500 minimum every month
Hey Lillian. You're most welcome. I'm glad my videos helped you in your financial journey so far :). I unfortunately won't be able to show a tutorial as I already signed up with my RA, but as far as I can remember you need to select the fund type on your application which should include the Skeleton Balanced 70 Fund. Otherwise you can always just contact their support to guide you through the process, I found them quite helpful so far :)
Jup that is correct. And then you can make lump sum contributions of R 5 000 + in addition to the monthly R 500 debit orders
What are the thoughts on investing in an RA with Old Mutual?
Hi Pieter. I have a question regarding the Cumulus Echo RA from Sanlam. The EAC is quite high, but they offer something called a "wealth bonus". Do you think the high EAC is worth it if you consider the wealth bonus?
Hey Megan. I actually moved my Cumulus Echo RA from Sanlam to Sygnia recently. The "Wealth Bonus" is just a marketing trick. It is basically funded from all the high fees you pay at the beginning. I ran the numbers a while back and concluded that the extra fees do not outweigh the bonus at the end, as you miss out on the capital growth on the money you pay away in fees at the beginning. So it is not a product that I personally will recommend to use.
@@MoneyMarx Thank you so much! đđŒ
@@MoneyMarx Thank You Pieter! I had exactly the same question regarding Sanlam, the exceptionally HIGH EAC and the wealth bonus. You have clarified my decision. Just one further question: what about PPS?
Same here with Sanlam. My "financial advisor" got me this one. But with this amazing information I'm moving to Sygnia
Been looking for for this answer.
Hi, is it advisable to open a ra if you are employed on a contract basis?
Hey Andisiwe. Yes if your employer does not provide a pension fund then it is advisable to open and contribute to your own RA.:)
Hi. The OUTaggresive fund isnât regulation 28 compliant? It allocates more than 30 % to offshore?
But thank you! This video has been very helpful and very well done!
Hey DeeCarli. Yeah you are right. I contacted OutVest to confirm this. I was not aware of it as it was listed with all the other funds on their website, so I assumed it would be compliant. But well done for pointing that out, just shows that you are doing proper research! :)
@@MoneyMarx great! Thanks for confirming and thanks for your feedback!
Are the annual average returns quoted by each provider (9% - 10%) gross of their costs or net of costs?
They will usually say in the MDD somewhere at the bottom in smaller texts, but the returns quoted are usually net of costs and fees
Hallo Pieter,I have RA at Old Mutual. Am I allowed to transferRA funds to EE RA? Or do I have have it wrong? Thanks
What are the thoughts on investing in an RA with Old Mutual?
What about now in 2024? Still the same rating?
What about Satrix? As far as I can ascertain, cost saving, good app & been around for a long time. What are your thoughts?
Satrix is also a good option. I haven't used it myself yet, but I know they have great products and the platform is also intuitive. I do think thy charge higher fees than Sygnia and 10X, hence why I don't really use them
â@@MoneyMarx0.62% EAC
Daai "Pieter" was baie "Afrikaans" - sal jy steeds Sygnia aanbeveel? Ek moet my RA move.....
đ
Hi, I'm currently in a predicament. I have an RA with Liberty with their Annual fees as follows, 26.6% after 1 year, 9.1% after 3 years, 4.1% after 5 years and 2.4% after 36 years. Now I'm planning on moving my RA to 10x investment which is the only one I've compared my current RA to. Any advice would be appreciated with regards to to a better RA out there.
Hey man. Sjo those are some pretty shocking fees! Better to move as soon as possible! I moved mine from Sanlam to Sygnia, but really Sygnia, 10x or Outvest are all great options. If you decide to move, just ask the RA provider to whom you want to move to initiate the "Section 14" transfer and they will send you all the necessary documents to complete.
Hello, I've just seen your comment and I work as a financial advisor. I just want to double check with you, are those not your Effective Annual Costs if an investor was to terminate the contract early- meaning that if you terminated your contract after 1 year you would be charged 26.6%, if you terminated it after 3 years it would be 9.1% etc.
@@StuMyBru44 hi Stuart, my financial advisor didn't tell me what exactly those % are for, he just said "he's never been asked about them before", I wish I should share a table of those fees he sent me for your viewing
@@AgKeClva_ I am also with Liberty. I am filled with regret. Are you still a client of theirs?
@@theresapaulse877 HI, I will be meeting with a financial advisor who poached from Liberty this month, I have started the process of getting info from 10x and Sygnia, will decide after my meeting with him a way forward but I told him I want to move my portfolio.
Hi, I have two issues. One, isn't the period for a tax free investment capped.. Surely standard bank cannot let your R500k grow forever at their expense.. Two, this is for RA - I know exactly how money grows in a tax free, but i don't know how money grows in an RA. Do you get the same money we put in when it comes to RA, or there is some interest grows? Questions..
Hey Stephans. Nope, there is no cap on your TFSA investment growth, only on your lifetime contributions which is capped at R 500k. Your investments inside your RA also grows free of income, dividend and capital gains taxes, just like a TFSA :)
Why don't you cover any other the bigger investment houses?
Their fees are exorbitant! My Momentum RA started with an EAC of 11.3%!!!!! That is shocking!!! I wish I knew more at the time! At the moment my Momentum RA has an EAC of 2.2%. It's still shocking! Leaving them ASAP!!
Can one take RAs with two different companies or we only limited to one? đ
You can have as many RAs with as many providers as you likeâŠbut why would you want to?
The tax benefit is applied by SARS though so the 27.5% or R350k limit applies across all the RAs you have when you complete your tax return.
It would seem like there are 100s of people that are struggling to cashout investments on Easy Equities
How Reliable is Outvest for RA?
Hey Lutendo. As a company they are quite well established, but I have recently seen that they are fiddling with their "One Fee" where they added some additional fees, which seemed to have upset a bunch of investors. Personally, I would narrow down my options to either Sygnia and 10X :)
You move your head too much, really hard to focus in on your videos and itâs such important information
I can't help it. My head is just so heavy filled with important information I want to share for free so that you can be better off financially
Turn off your screen and listen to audio only instead.