Ask Maya – Why can’t I cash in my retirement annuity?

retirement Ask Maya – Why can’t I cash in my retirement annuity?

The questions we received from readers this month highlight how valuable your credit record can be. Whenever you take on debt, beware of the real cost of missing payments or not being able to repay them. Make sure you get your free annual credit check from credit bureaus. Some websites also offer consolidated reports

Sibusiso writes:
I am 32 years old and have been unemployed since March 2012 and living off my provident fund since then.

In January 2013, I had to make my RA paid-up because I could no longer make the monthly premiums. I then requested my RA money to be paid out so that I could pay it towards my mortgage but was informed I was unable to do so.

I have taken the issue up with the Financial Services Board and Sars, both of which have given me a negative response. I have now received a final demand from the bank on my mortgage arrears. What recourse do I have?

Maya replies:
Unfortunately the law around retirement annuities is clear. You cannot draw down on it before retirement.

Government’s position is that they have given you a tax exemption on your contributions and therefore have the right to insist that you keep these funds for retirement.

You have no legal recourse with regards to your RA but I would suggest that you speak to your bank about your current situation.

You may have to consider selling your home before you are in a position where the bank forces you to sell and you have to accept a far lower offer.

Subsequent to the recommendation to Sibusiso to speak to his bank, he informed City Press that Nedbank has assisted him even though their lawyers had already issued a summons.

“Their programme is called Nedbank Assisted Sale (NAS).

“They sent their evaluator and then put a price on the property.

“They sent me a mandate contract and have assigned an estate agent to me.

“I am planning for the possibility of moving sooner than anticipated but my credit health will stay intact until I can afford to buy another property,” writes Sibusiso

The post Ask Maya – Why can’t I cash in my retirement annuity? appeared first on City Press.

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