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Benefits of Investing in Approved Retirement Funds
As we approach retirement age, it is important to think wisely on how we will support ourselves financially in future. You will find that one way one can secure their future is by investing in approved retirement funds. ARF is a flexible investment fund that one is able to own personally and have the ability to manage and control once they hit the retirement age. It is important for one to invest wisely as there are high and low risk funds when you invest in particular types of assets or funds. Therefore, make sure that the ARF you decide to invest in will offer you diverse options that will meet your needs in future. In this article, we will outline some of the benefits one will gain once they consider investing in ARF.
Once you invest in approved retirement funds, you will be in full control of your retirement funds. Here, you are able to invest in suitable assets and decide how much taxable income you want to withdraw each year. In case of death, you will note that your funds will be payable to your dependants. Your loved ones can withdraw money using your name or can transfer the funds into their names and are not required to pay any income tax for the transfer. Once you leave your funds to any other person, they will be required to pay income tax depending with who they are and other related circumstances. Therefore, with ARF, you enjoy flexibility and are able to decide on how to manage your investment according to your needs.
Another benefit one stand to gain is that you get to decide and choose the level of income you get to receive from your ARFinvestment. According to your needs during retirement, you get to decide how much you will be receiving at the end of each year. Here, you can decide to make partial withdrawals each month as if you are under a payroll. You will note that at some age, your withdrawals will be regulated to a certain minimum. You will find that if you do not make the withdrawals, you funds will be subjected to tax and taken directly from your account. According to your financial needs, attitude and risks involved, you get to invest the type of ARF that will suit you the most.
You can decide to invest in direct property, shares, bank deposits, international funds among others. This gives you a wide range of assets that you can decide to invest in and secure your retirement future. Another benefit that comes with ARF is that investment growth achieved is not taxable. You will note that your investment is subjected to growth and the amount achieved is added into your funds without being taxed. The only time your investment is taxed is when you are making withdrawals from your ARF. It is also possible to have a secure regular income in future as you can use your ARF to buy annuity. This way, you are able to retire with your mind at ease knowing that your financial needs will be taken care of.