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Retirement Funds

In this lesson we will consider different types of funds which we broadly call retirement funds. Each of the types of funds which we consider in this lesson are slightly different but they are taxed in a similar manner, which is why we have grouped them together.

The types of retirement funds we will consider are:

  • Pension fund
  • Provident fund
  • Retirement annuity
  • Preservation fund

Before we explain the above, we want to explain what in annuity is, as we will refer to annuities in this lesson.

Basically, an annuity is a repetitive, periodic (usually annually or monthly) payment, that is owed to a person until their death or the happening of some other event. It is important to know that income earned from an annuity forms part of your gross income even if it does not fall under the general definition of “gross income”.