Introducing the Franc Retirement Annuity: Your Next Step Towards Financial Freedom
At Franc, we believe building financial freedom is a journey – one that should feel intuitive, empowering, and suited to your real life. That’s the philosophy we applied when developing our newest product: the Franc Retirement Annuity.
A retirement annuity can be one of the most powerful ways to secure your future, thanks to long-term growth and generous tax benefits. But too often, they’ve been made complicated, intimidating, or only accessible to people with thousands of rand to spare. We’ve changed that.
The Franc Retirement Annuity is designed for ambitious South Africans who’ve already laid their financial foundations and are ready to take the next step, making sure their money keeps working for them far into the future.
Whether you’re already a Franc customer or exploring the best retirement annuity in South Africa, this article explains how it works, why we’ve built it, and how you can get started.
What is the Franc Retirement Annuity?
The Franc Retirement Annuity is a South African retirement annuity fund designed to grow your long-term wealth while giving you ownership and control over your financial future.
Unlike a pension fund, which is tied to your employer, a retirement annuity belongs to you. It moves with you wherever your career takes you, ensuring your savings are never left behind.
Key features of the Franc Retirement Annuity
1. It’s an investment product that flexes with you.
Your Franc Retirement Annuity is yours for life. It stays with you wherever you work, and you can start, pause, or top up contributions depending on where you’re at in your life. Unlike employer retirement funds, it never gets tied up or lost when you change jobs – all you need to do is log into your Franc account on the app to track its balance and growth.
2. We’ve kept it simple and straightforward so you can focus on funding it.
Because life is too short to get caught up in unnecessary complexity and overwhelming choice, we provide one carefully chosen fund, explained in plain language, with transparent and easy-to-understand fees. No jargon, no confusing choices, just straightforward investing built for long-term growth.
3. Start investing smart from as little as R125.
You can make a deposit into your Franc Retirement Annuity anytime you like with as little as R125. Start small, work your deposits up, and scale down whenever you’re going through a career break or tough time.
Who can invest in the Franc Retirement Annuity?
The Franc Retirement Annuity is available to Pro Account holders – an account tier built for investors who are ready to take their portfolios to the next level with additional investment pots or goals, more Child Accounts, and other funds (like the Retirement Annuity and Bitcoin Goal).
We’ve placed the Retirement Annuity in the Pro account because of how important it is to use it at the right stage of your journey.
That’s because at Franc, we believe in the champagne tower model: fill your emergency fund first, after which your savings and investment budget can flow over to your Tax-Free Savings Account or any shorter-term goals, and then a retirement annuity.
That way, your Franc Retirement Annuity works exactly as it’s designed: securing your long-term future without you ever needing to dip into it because you have your other bases covered.
The Fees
We believe in keeping things simple and transparent. No commissions. No hidden admin costs.
Fees apply to your assets under management – the balance in your Franc Retirement Annuity:
- Franc fee and administration fee: 0.87% (ex VAT) per year
- Underlying fund fee (Sygnia): 0.45% (ex VAT) per year
- Total fee: 1.32% (ex VAT) per year
A R350 processing fee will apply to all withdrawals from your Savings Pot, which are limited to once a tax year year by law and levied by our administration partner.
How to get started
If you want to start investing in the Franc Retirement Annuity, here are the easy steps:
- Upgrade to a Pro Account in the Franc app.
- Select the Franc Retirement Annuity card from the home screen.
- If you haven’t already verified your details, you’ll be asked to complete verification before proceeding.
- As a final step, you’ll need to be asked to add at least one beneficiary.
FAQs
What’s the difference between a pension fund and a retirement annuity?
A pension fund is linked to your employer. If you change jobs, you will need to transfer your money to another fund. A retirement annuity is yours – you get to choose it, and it stays with you wherever you work.
What are the benefits of a retirement annuity?
Retirement annuities are one of the most tax-efficient ways to invest. You can claim up to 27.5% of your annual income (capped at R350,000/year) as a deduction on your taxable income.
What’s the Savings Pot in the Franc Retirement Annuity?
As part of the two-pot retirement system, your contributions are split between a Retirement Pot (which are only accessible at retirement age) and a Savings Pot (which you can accessible earlier, once every tax year with a minimum withdrawal of R2,000 and taxed at your marginal tax rate). The Savings Pot allows limited withdrawals if life throws curveballs, but we strongly recommend not dipping into it. Your emergency fund in a Franc Savings Account is always the better option for emergency needs.
Who should open the Franc Retirement Annuity?
It’s for people who’ve laid their financial foundations – with an emergency fund and a TFSA – and are ready to start building towards long-term financial freedom.