Results 1 to 5 of 5

Thread: lumpsum cash or living annuity

  1. #1
    New Member
    Join Date
    Jul 2017
    Location
    south africa
    Posts
    5
    Thanks
    0
    Thanked 0 Times in 0 Posts

    lumpsum cash or living annuity

    So i had the option of deciding ..on a cash lumpsum after tax of my late.husbands.pension.2mil950 tax(1mil1hund) or a cash portion out and the remainder in an annuity .Im 38 urs.old.and altho the annuity would of.saved me tax.

    I felt in the.long run it would of not lasted me plus all the annuity fees ...so i opted.for the after tax amount...and fixed.it in a 5yr and 2yr fixed.deposit with great interest rates.What would u have done?

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    21,358
    Thanks
    3,095
    Thanked 2,494 Times in 2,098 Posts
    Blog Entries
    12
    What interest rate are you earning on the fixed deposit?

    Why didn't you diversify across different asset classes?
    The trouble with opportunity is it normally comes dressed up as work.

    Alcocks Electrical Services | Alcocks Pest Control & Entomological Services

  3. #3
    Silver Member
    Join Date
    Aug 2014
    Location
    Johannesburg
    Posts
    314
    Thanks
    26
    Thanked 19 Times in 17 Posts
    We don't know your current situation, so can't comment on what you should do, I can only comment on what I would do.

    I would've paid the taxes and cashed out the lot. then reinvested all of it and get back to work as if nothing happened.

    If you have an existing business or a flexibond you will have a better return putting your money into those vehicles rather than an annuity. With a bond paid off you will have extra cashflow from rental money. You could use the extra cashflow and lumpsum amounts to buy more property and scale your portfolio.

    I always have the view that you should treat unearned windfalls (insurance, inheritance etc) as money that should be dedicated to long term investments. Never spend the capital, this money should not be used for vacations, cars, furniture or other things that will cost you in depreciation, time, storage and general effort. It should be reinvested and forgotten about as if it didn't exist in the first place, then get back to work as per usual.

  4. #4
    New Member
    Join Date
    Jul 2017
    Location
    south africa
    Posts
    5
    Thanks
    0
    Thanked 0 Times in 0 Posts
    I fixed. A portion at 10%p/a and a portion at 8%p/a in a flexi account were can also make deposits .i left a portion uninvested.to take care.of excutor fees and other charges that may be related.to the.will.

    IM not very familiar with asset classes but what would u recommend as a good tax saving investment?

  5. #5
    New Member
    Join Date
    Jul 2017
    Location
    south africa
    Posts
    5
    Thanks
    0
    Thanked 0 Times in 0 Posts
    I did exactly that i paid tax...
    and withdrew the balance
    ..my only income is going to be from the interest earned which amounts to about 270 000 for the year ....i have med aid gapcover and daily monthly expenses ...which has too be paid from this ...any idea how the tax for the coming year is going to be and how i can really reduce it?
    Last edited by Dave A; 20-Jul-17 at 06:35 AM. Reason: per poster

Similar Threads

  1. [Question] ANNUITY DEDUCTiBLE TAX BENEFIT ERROR????
    By Patsy in forum Tax Forum
    Replies: 3
    Last Post: 29-Jul-15, 02:05 PM
  2. Replies: 2
    Last Post: 11-Jan-14, 02:37 PM
  3. [Question] Retirement Annuity deductions for Individuals Tax
    By nichoalscfm in forum Tax Forum
    Replies: 4
    Last Post: 27-Aug-12, 10:04 AM
  4. products, software and annuity income
    By duncan drennan in forum Entrepreneurship and Business Management Forum
    Replies: 2
    Last Post: 23-Nov-06, 10:14 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •