Why Life Company Retirement Annuities Are Often Expensive

Many traditional life retirement annuities in South Africa include layered fees such as:

• Upfront commission

• Ongoing advice fees

• Administration charges

• Asset management fees

• Early termination penalties

• Policy fees

These costs are often bundled, making it difficult to clearly identify the true Effective Annual Cost (EAC).

Most investors do not know:

• Their IRR since inception

• Their total annual investment cost

• The long-term impact of fees

• Whether they are still locked into penalties

And over 20 years, even a 2% difference in cost can significantly reduce your retirement capital.