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Retirement Annuity
A retirement annuity (RA) is a simple account that lets South African investors save for retirement. An RA invests in unit trusts but offers certain tax benefits to help you grow your nest egg.
People who are self-employed use RAs as a single solution to house all of their retirement contributions, while those who work for an employer can use it to supplement their existing employer fund contributions.
How it works
You can open a Coronation RA by completing our online application form. During this process you need to select a suitable fund to power your retirement savings and decide how you want to contribute (via lump sum amounts, regular debit order, or both).
Once you start contributing, your money will be split into two components, both of which are invested in the same underlying fund/s.
- Two-thirds of each contribution will be allocated to your Retirement Income Component
- The remaining one-third will be allocated to your Retirement Lump Sum Component
Why a Coronation RA makes sense for you
An RA is one of the most popular ways to build up capital that will benefit you in retirement. This is thanks to its dual tax benefits that can have a material impact on the value of your nest egg:
Investment returns grow tax-free while you remain invested.
Contributions are tax-deductible (up to certain limits).
Example
The power of tax-free investment growth within your RA
Jon, 30, is self-employed, earning R80,000 monthly. He opens a Coronation RA, investing R20,000 per month in the Coronation Balanced Plus Fund.
At a 10% annual return, his investment grows to R41m by age 60. While Jon contributes R7.2m over 30 years, his investment growth (that grows tax-free within his RA) adds R34m – demonstrating the power of long-term, tax-free compound growth.
RA contributions are tax deductible
Jon can deduct his contributions from his taxable income – up to 27.5% or R350,000 annually, whichever is lower. Let’s see how this affects his tax given his annual income of R960,000 (R80,000 X 12).
Scenario 1:
If Jon didn’t contribute to his RA
Using the 2026 tax tables and including the primary rebate, he would pay R275,884 in tax.
Scenario 2:
Because Jon did contribute to his RA
Jon’s total annual RA contribution of R240,000 is tax deductible because it is:
- 25% of his total income (below the 27.5% limit)
- Is less than the R350,000 p.a. limit
This also pushes him into a lower tax bracket, and the net tax he would pay is R180,242.
By contributing to an RA, Jon reduces his tax payments by R95,642 annually
What are the benefits and restrictions?
In order to help retirement savers make the most of their RA accounts, here are the benefits and restrictions to consider:
Benefits
- Invest from as little as R500 per month, or a lump sum deposit of R5,000 or more (R10,000 for the initial investment)
- Stop or restart your contributions as your circumstances change
- Choose from our range of unit trust funds (but subject to Regulation 28* compliance) and switch between funds
- No initial fees, account fees or administration fees
- Ability to transfer to another RA provider
- Contributions are tax deductible (up to certain limits)
- Investment growth while invested in the RA (interest and dividends) is tax-free.
- Contributions are protected from most creditors
- Upon death, the full value of your RA can be transferred to dependents
- One annual withdrawal (minimum of R2,000) from your Retirement Lump Sum Savings Component per tax year, taxed at your marginal tax rate
Restrictions
- Your underlying investments needs to comply with Regulation 28*, currently limiting equity exposure to 75% and international exposure to 45% of the value of the investment
- You can only invest in rand-denominated unit trusts
- You can only access most of your savings at the age of 55 (or earlier if you are permanently unable to work due to injury/illness)
- At least two-thirds of proceeds at retirement must be used to buy a retirement income
- You may not borrow from your investments in an RA
*Reg 28 sets out asset class limits to protect investors from the effects of poorly diversified investment portfolios. You can simply choose one of Coronation’s Reg 28-compliant funds, or if you want to build your own portfolio from Coronation’s range, you can use our Reg 28 Calculator to help ensure compliance.
Funds
What are my investment options?
You can choose to invest in any of our rand-denominated unit trust funds subject to the individual fund or combination of funds complying with Regulation 28* of the Pension Funds Act.
Popular choice
Balanced Plus
This fund is our flagship fund for retirement savers. It reflects our core house investment view within the constraints that govern retirement annuities. It invests in a combination of shares, bonds, property, and cash - locally and globally - with a strong focus on growth assets to maximise long-term returns.
- Invests across shares, bonds, property, and cash, locally and globally
- Foreign exposure limited to 45%
- Regulation 28 compliant
Risk rating
Recommended investment term
5 years +
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Balanced Plus
The fund aims to achieve the best possible investment growth for retirement savers (within the constraints of Regulation 28 of the Pension Funds Act) over the long term.
Investor profile
The fund is suitable for investors: Building up long-term retirement capital. Requiring a moderate capital growth portfolio. Looking to preserve the purchasing power of their capital over the long-term, but not prepared to accept the short-term turbulence of the equity market. With a time horizon of five years or longer.
Benchmark
South African – Multi-asset - High Equity ASISA fund category average (excluding Coronation funds)
Risk rating
Recommended investment term
5 years +
Exposure to growth assets
Maximum: 85%
Annualised past performance (after fees)
| Returns | Fund | CPI + 5% | PEER GROUP AVERAGE |
|---|---|---|---|
| Since Launch (unannualised) | 4,522.2% | 2,034.4% | 2,957.4% |
| Since Launch (annualised) | 13.9% | 10.9% | 12.3% |
| Latest 20 years (annualised) | 12.1% | 10.4% | 10.1% |
| Latest 15 years (annualised) | 11.1% | 10.1% | 9.6% |
| Latest 10 years (annualised) | 9.3% | 9.8% | 8.1% |
| Latest 5 years (annualised) | 16.1% | 10.0% | 13.9% |
| Latest 3 years (annualised) | 17.5% | 9.1% | 14.8% |
| Latest 1 year | 24.3% | 8.7% | 18.1% |
| Year to date | 19.4% | 7.8% | 15.9% |
Capital Plus
This fund is for investors seeking steady, inflation-beating growth with lower volatility. It invests across shares, bonds, property, and cash locally and globally to balance growth and capital protection. It’s a suitable fund option that automatically manages the constraints that govern retirement annuities.
- Aims for steady medium- to long-term growth with less volatility than typical balanced funds
- Diversified across shares, bonds, property, and cash, locally and offshore
- Regulation 28 compliant
Risk rating
Recommended investment term
3 years +
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Click here to see the returns of this fund if you had invested sooner
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Capital Plus
The fund is in the first instance managed to achieve reasonable investment growth over the medium to long term. Our intent is that the fund should produce an annualised return of at least inflation plus 4% over time. In addition, we aim to achieve less volatility than the average balanced fund. It is specifically managed to suit investors who want to draw an income over an extended period of time.
Investor profile
The fund is suitable for investors: Seeking a risk-conscious investment solution enabling an annual income drawdown over an extended period of time. Requiring a reasonable rate of real return over investment horizons of between 3 and 5 years, achieved at less volatility than that of the average balanced. When your objective is to accumulate capital over the long term, the fund is only suitable if a strong focus on managing downside risk and volatility is a priority. This fund can invest in a wide range of assets, such as shares, bonds, listed property and cash, both in South Africa and internationally, in a manner similar to that usually employed by retirement funds.
Benchmark
CPI + 4% p.a.
Risk rating
Recommended investment term
3 years +
Exposure to growth assets
Maximum: 75%
Annualised past performance (after fees)
| Returns | Fund | CPI | REAL RETURN |
|---|---|---|---|
| Since Launch (unannualised) | 1,338.6% | 269.6% | 1,068.9% |
| Since Launch (annualised) | 11.6% | 5.5% | 6.1% |
| Latest 20 years (annualised) | 10.2% | 5.4% | 4.7% |
| Latest 15 years (annualised) | 9.3% | 5.1% | 4.3% |
| Latest 10 years (annualised) | 8.5% | 4.8% | 3.7% |
| Latest 5 years (annualised) | 14.2% | 5.0% | 9.3% |
| Latest 3 years (annualised) | 16.8% | 4.1% | 12.6% |
| Latest 1 year | 22.5% | 3.7% | 18.8% |
| Year to date | 17.7% | 3.6% | 14.1% |
Popular funds
See all popular Coronation fund options for a retirement annuity.
Invest Now
Experienced investors or those who prefer to build a custom portfolio can use our Invest Now process designed to meet every need.
Investment quote
Create a summary of your prospective investment. This is a useful document for comparisons prior to investing.
Our insights
Frequently asked questions
Each fund has an annual management fee, which covers professional investment management and administration. All fees are fully disclosed on each fund’s fact sheet and on our website.
We don’t charge any initial, account, or transaction fees. Your full investment goes into buying units in your chosen fund.
If you have a financial adviser and agree to a fee with them, we can deduct it from your account and pay it directly to your adviser.
Before retirement
You may make one withdrawal per tax year (minimum R2,000) from the Lump Sum Component (to which one-third of your contributions gets allocated).
You cannot access the Retirement Income Component before retirement (to which two-thirds of your contributions get allocated).
At retirement
You may retire from the fund any time after age 55, or earlier if you are permanently disabled.
- The Retirement Income Component must be used to buy a post-retirement income (e.g. Coronation Living Annuity or a guaranteed life annuity) from a registered insurer.
- The Retirement Lump Sum Component can be:
- Taken as cash (taxed using the more favourable retirement tax tables), or
- Added to your Retirement Income Component to boost your annuity. - If your Retirement Income Component is below the legal threshold, you may take the full amount in cash.
Before retirement
Any withdrawal from your Retirement Lump Sum Component (one withdrawal per tax year allowed, minimum R2,000) is taxed at your marginal tax rate.
At retirement
Any cash lump sum is taxed according to SARS’s retirement tax tables. Your monthly pension (retirement income) is taxed at your marginal income tax rate.
Yes. Coronation issues tax certificates each year confirming the contributions you made, which you can use to claim your tax deduction.
Simply log in to our secure online service and select Reports in the menu. Select Income Tax Certificate and follow the easy step-by-step wizard.
Yes, you may switch between the underlying unit trust funds as your investment objectives and circumstances change.
No. The Coronation Retirement Annuity Fund is designed to allow you the flexibility to stop and restart your contributions at any time without incurring any penalties.
No. After the age of 55, it is up to you to decide when to retire and start drawing an income. The longer you delay the drawdown of income, the longer your investment can grow, and the longer your retirement income could last you.
No.
Yes, except for SARS where you owe arrear taxes, and with the exception of arrear maintenance payments due under a court order.
Yes, this is called a Section 14 transfer.