Saving for retirement

Start saving now so that you have enough income when you stop working to enjoy a comfortable retirement.

About Retirement Annuities

It’s never too early to start saving

At some point in the future you’ll stop working and start enjoying a well-earned retirement. If you’ve prepared for this stage of life by saving from early on, you’ll have enough income to enjoy the retirement you deserve. While there are several ways you can save for your retirement years, a retirement annuity offers valuable tax benefits as well as investment options that allow you to grow your savings over time. And with one of Sanlam’s Retirement Annuities, you can look forward to a cost-effective savings option that inspires you to get saving, motivates you to stay on track and ensures peace of mind.


Why a Sanlam Retirement Annuity?

Premiums from as little as R300 pm
Goal-based saving to help you stay on track
Echo Bonus payout at retirement with the Echo Retirement Annuity
Retirement savings expertly managed on your behalf
Option to remain invested after retirement
Product Options

Choose the right solution for your needs

Cumulus Echo
  • Offers a carefully selected list of active and passive funds that you can choose to suit your individual risk profile as you grow older
  • Pays out an Echo Bonus as a reward for staying committed to your retirement goals – the longer you save and the more you put away, the bigger your bonus.
  • Provides access to a wide choice of underlying investments and gives you the flexibility to change these as and when you like.
  • Allows you to stop and start contributions at any time without incurring penalties.

How much should you be saving?

When you retire, you generally need less income than you required before retirement. This is simply because some of your expenses like travelling to work will fall away, and you will also pay less tax after 65 (and even less after 75). Depending on your retirement plans, you would need at least 60% of your final pre-tax salary after retirement.

There’s an added bonus to staying on track

If you choose to save for your retirement with a Sanlam Cumulus Echo Retirement Plan, we’ll reward your commitment with an Echo Bonus – an additional sum of money that’s added to your retirement savings when you stop working. The longer and the more you save, the bigger your Echo Bonus will be.

Product Information

Take a closer look at our retirement annuities

Pension and provident funds vs retirement annuities
While all three of these options qualify for the same tax benefits, there are significant differences between them. Both pension and provident funds are offered by an employer – often as a condition of employment – with you and your employer making monthly contributions to these funds. Retirement annuities, on the other hand, are bought by the individual, meaning you’re free to contribute to one whether you’re self-employed or you already contribute to a pension or provident fund. They also typically offer wider investment fund choices than either of the other two funds.
Tax benefits
According to current tax legislation, and depending on your tax situation, retirement annuities offer valuable tax benefits. You pay less tax. When you pay into a retirement annuity, you’re permitted to deduct your monthly contribution from your taxable income – up to the lesser of 27.5% of your income or R350 000. This means you’re taxed on less of your income, which translates into less tax. Contributions in excess of the 27.5% limit that did not rank for deduction may be carried forward and deducted from your future taxable income, including a retirement lump sum or pension income. The growth on your investment is tax-free. The investment returns earned in a retirement annuity fund are not currently taxed.
If you pass away
Should you die before becoming entitled to a retirement benefit, the value of the underlying investments will be available to the beneficiaries. In accordance with law, however, the trustees of the fund make the final decision about how and to whom the benefit is to be allocated, after taking into account your dependants’ needs.
Stopping or pausing your contributions
It’s important when saving for retirement to have an investment strategy that lines up with your goals, appetite for risk, and planned retirement age – regardless of what’s happening in the markets. Avoid making hasty decisions driven by fear and take advantage of volatile markets with an investment product that requires regular contributions – this allows you to buy more units when the market is down and get ahead when things start to improve. Lastly, aim to manage times of uncertainty with proper financial planning and remember that saving for retirement is a long-term strategy requiring patience and persistence – as the saying goes, ‘It’s not about timing the market, but about time in the market.’
Your investment over time
Depending on your retirement plans, you’re likely to need at least 75% of your final pre-tax salary after retirement – bear in mind that some of your expenses will fall away once you stop working and you’ll pay less tax after 65 and even less after 75. What this means is that you’ll need to have saved at least 15 x your final annual salary in order to retire comfortably. This can be broken down over time to give you a sense of whether or not you are on track. 5 years – 1 x your annual salary; 10 years – 2 x your annual salary; **20 years **– 5 x your annual salary; 30 years – 10 x your annual salary; and 40 years – 15 x your annual salary.
Echo Bonus
The Echo Bonus is a sum of money added to the Sanlam Cumulus Echo Retirement Plan at retirement. It is designed encourage disciplined saving over the life of your annuity and to boost your retirement nest egg. The more payments you make into your retirement annuity, and the greater the value of these payments over the term of the plan, the larger your Echo Bonus will be.
Fees are charged for the administration and management of your investment and vary per product and your underlying investment. Please speak to your financial planner to make sure you understand which fees you pay and why.
Making changes to your retirement annuity
No charges will be levied for changes you make to your retirement annuity after your planned retirement date. However, if you are a Sanlam Echo client, a transaction charge – currently the smaller of R300 and 1% of the fund value – will apply if you:
  • Reduce or stop the recurring payment
  • Take an early retirement benefit
  • Terminate the plan
If you are invested in the default fund and decide to add the ability to select your own funds, a R300 charge will be applied.
At retirement
You may withdraw your retirement savings from your Sanlam Retirement Annuity at any point after you turn 55. Early retirement due to ill-health or disability is treated in exactly the same way as a normal retirement. According to current legislation, up to one-third of your retirement benefit may be taken as a lump sum, which may be subject to tax. Your remaining savings must be transferred to a post-retirement income-generating solution where they will be used to provide regular pension payments. Should you choose a Glacier Retirement Annuity, we will transfer your investment at no charge and without exiting the markets. The total value of your savings at retirement will be equal to the sum of the value of your investment in each underlying investment fund, less the transaction charge, if applicable. The value of your investment in each investment fund is calculated as follows: the number of units you have in the fund multiplied by the unit price of the fund at the calculation date. Your Sanlam Echo Bonus (a feature of the Sanlam Echo Retirement Annuity) will also be paid out to you at retirement. If you retire early, the Echo Bonus that is added to the fund value will be lower than it would have been if you had invested until your planned retirement date.

Speak to an expert

If you need help deciding what your next steps should be, speak to a Sanlam adviser who can help you make the best choices for you and your loved ones.

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