Take your time and make the right decision
It’s a good idea to speak to your scheme adviser or your personal financial adviser to help you plan for your retirement. If you don’t have an adviser and would like to find one in your area, please click here.
A lower income now will result in your savings lasting longer
In order to draw an income, you will need to transfer your retirement savings into an income providing product, such as the Allan Gray Living Annuity (LA). You may also move your retirement savings to an income providing product offered by a different financial services provider.
What are the benefits of choosing this option?
- You choose how much income to draw, within the legal limits. You can change your income amount and frequency every year.
- You can choose from our simple range of unit trusts and you can change your selection when you need to, no transaction fees and no penalties.
- Any money left in your LA when you die can be left to your beneficiaries and can be paid immediately, without waiting for your estate to be wound up.
Important points to consider
- Your income is not guaranteed. It depends on your investment value and the return you earn. If your investment value drops, or you do not earn enough return, you may need to draw a lower income than you would like.
- If you draw too high an income, your investment might not last.
- Investment performance fluctuates over the short to medium term. You take on the risk that your investment may not perform as you expect.
Complete the following steps:
- Complete and sign the Retirement Notification instruction.
- Complete and sign the Living Annuity Application instruction.
- Email the above forms to instructions@allangray.co.za.
We will contact you once we have received your forms.
Carefully consider the tax implications before choosing this option
When you retire, you have the option of taking up to a maximum of one third of your retirement savings as a cash lump sum. The rest must be transferred to an income-providing product, such as the Allan Gray Living Annuity. If your investment value is less than R247 500, you may take the full amount as a cash lump sum.
All previous withdrawals (including retirement cash lump sums and severance benefits) are taken into account when calculating how much tax you will pay.
| Cash lump sum amount | How much tax you will pay |
| R0 - R500 000 | 0% |
| R500 001 - R700 000 | 18% of the taxable amount above R500 000 |
| R700 001 - R1 050 000 | R36 000 + 27% of the taxable amount above R700 000 |
| R1 050 001 and above | R130 500 + 36% of the taxable amount above R1 050 000 |
Your cash lump sum amount is significantly reduced by tax
Example 1: If you take a cash lump sum of R650 000, you will pay R27 000 to SARS (18% of R150 000).
Example 2: If you take a cash lump sum of R1 200 000, you will pay R184 500 to SARS (R130 500 + R54 000).
A retirement instruction cannot be cancelled
Many retirement fund members change their minds about taking a cash lump sum once they see how much they will be taxed. It is important to realise that you cannot cancel your instruction once you have submitted it.
We apply for a tax directive when we receive a retirement instruction. In terms of legislation, once a tax directive has been applied for the instruction cannot be cancelled. The taxable amount stipulated on the directive is final and will be paid to SARS from your account and the balance of your requested lump sum amount will be paid to you.
If you are invested in the Allan Gray Umbrella Provident Fund (your account number will start with AGUP), you can choose how much of your savings you want to take as a cash lump sum and how much, if any, you want to transfer to an income providing product, such as a living or life annuity. The tax implications on cash lump sums may be significant and in terms of SARS rules, once you submit your instruction you cannot retract it. It is important that you understand these tax implications before you submit an instruction.
Complete the following steps:
- Complete and sign the Umbrella Retirement Member Exit Instruction.
- Any remaining balance will need to be transferred to another Fund. If you would like the balance to be transferred to the Allan Gray Retirement Annuity, complete and sign the Retirement Annuity Fund Application instruction; if you would like the balance to be transferred to the Allan Gray Pension/Provident Preservation Fund, complete and sign the Pension and/or Provident Preservation Fund Application instruction.
- Email the above forms to instructions@allangray.co.za.
We will contact you once we have received your forms.
Please note: once we receive your instruction and all required documents, we will apply for a tax directive from SARS. The tax directive may not be altered and your withdrawal instruction cannot be cancelled.