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Investo FAQs

Investo Retirement Annuity FAQs



When will I choose a retirement annuity (RA)?

It's for you if you want to invest regularly towards your retirement (say monthly or yearly) and grow your money while benefiting from tax incentives. You can also add once-off amounts. You can save extra in an RA if you have a pension fund at work. If you don't contribute to a pension fund, it's a great way of making provision for your retirement in a tax-efficient way. South African citizens or persons with valid work permits may invest.

Can I withdraw money from my retirement annuity (RA) before I retire?

Currently, you have access to the money from age 55. Before that, you can take out money only if you emigrate or became disabled. If your savings are lower than a certain amount, you may take it too.

From 1 September2024, you have access to one-third of your contributions every tax year, from 1 March until the end of February. You may withdraw once a year, an amount of at least R2 000.

Can I stop paying my retirement annuity (RA) contributions?

You can stop paying, but the money stays invested until you turn 55.
From 1 September 2024, you have access to the money in your so-called savings component of the retirement annuity. You may withdraw it all. The rest will stay invested until you turn 55.

What are the tax benefits of saving in a retirement annuity (RA)?

They are great. For example: If you contribute R1 000 a year, you will get R360 back from the tax man if your marginal tax rate is 36%. It “costs” you only R640 to invest R1 000.

You can invest up to 27,5% of your taxable income or remuneration, whichever is higher. You can do this whether you are self-employed or earning a salary but not yet contributing the full amount to your employer’s pension fund. The maximum tax deduction you can claim in a tax year is R350 000, a limit that applies only when you are earning more than R1,27 million a year.

Is there a minimum amount I need to invest each month?

1. R500 minimum when you invest in Momentum funds.
2. R750 minimum when you invest in one or more non-Momentum funds.
3. R150 if you already have another Investo contract.

What happens to my retirement annuity (RA) when I die?

Your dependants or the loved ones you have indicated receive the money as prescribed by law.





Investo Linked Investment FAQs



When will I choose a linked investment?

You want to grow your money over the medium to long term by contributing regularly. You want flexibility and wish to add once-off amounts as you please. You will choose a linked investment if your marginal tax rate is less than 30% because you pay tax on the growth you earn every year. South African citizens, trusts, companies, close corporations and non-profit organisations may invest.

How do linked investments work?

The linked investment is a flexible savings plan, which means you can adapt your investment as your needs change. The solution is designed for long-term growth, but you may take your money if necessary. You can contribute at regular intervals and add once-off amounts. You pay tax on your growth and will use your interest and capital gains tax exemptions to minimise the tax payable.

Do I have a choice of investment options?

Yes. We offer local and global funds. You can choose among fund managers and the types of assets you want to invest in. For instance, do you prefer shares, bonds, property, or a mix? Choose from the Investo fund range and the Momentum Investments outcome-based solutions range to let your money grow.

For how long do I need to be invested?

You can take your money anytime, but you must stay invested for at least 5 years to earn a loyalty bonus.

Can I withdraw money from my investment if I want to?

Yes, but you need to keep at least 20% invested. For the best long-term growth, it's better to stay invested.

Do I need to put down a lump sum amount?

No, but you can if you want to. You can invest monthly, which will be a minimum of R500 per month in Momentum funds and R750 in non-Momentum funds. You can also invest once-off amounts of at least R5 000 at any time.





Investo Endowment FAQs



When will I choose an endowment?

Choose an endowment if you want to save for a goal. People in a higher tax bracket often prefer this product. Individual investors, trusts, companies, close corporations and non-profit organisations may invest.

How do endowments work?

It is designed for long-term growth. There are restrictions to how much money you can add to or withdraw from your investment. If you exceed those, you trigger a new period of 5 years, during which some transactions on your investment are limited.

What are the tax benefits of having an endowment?

We pay the tax on the product, which means you will not be taxed separately on the growth of your investment. It is a great advantage if your personal income tax rate is higher than 30%.

If I pass away, what happens to the money in my endowment?

The loved ones you have nominated as your beneficiaries will receive your money.

Can I withdraw money from my endowment if I want to?

You may withdraw once during the first 5 years of your investment and take out one loan. There are restrictions to how much money you may withdraw however after the first 5 years, you have full access to your money unless you trigger a new restriction period.

Do I need to put down a lump sum amount?

No. You can invest a R500 monthly minimum in a Momentum fund or a R750 monthly minimum in non-Momentum funds. You can also invest R150 per month if you have another Investo contract. If you want to add a once-off amount, it must be at least R5 000.





Investo Preservation Fund FAQs



What is a preservation fund?

A preservation fund is a retirement fund to keep your retirement money safe if you have resigned from an employer. You may access your money when you turn 55.

What happens at retirement if I am in a pension preservation fund?

If you retire, you must buy a product, called an annuity, that will pay you a pension income. You may take part of the money as a lump sum, which you may be taxed on. Your lump sum may not exceed one-third of your retirement value.

What happens at retirement if I am in a provident preservation fund?

If you retire, you can buy a product, called an annuity, that will pay you a pension income. You may also take all your money, or a portion of it, as a lump sum, which you may be taxed on.

How does two-pot affect my preservation fund?

It works like for a retirement annuity. You will have access to the seeding capital that is transferred to the savings component on 1 September 2024. At age 55, you get access to all your money.

Contact Momentum Investo

Investo





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