CAPE TOWN, Feb 15 (Reuters) - South Africa's President Cyril Ramaphosa said on Thursday that he planned to sign into law a National Health Insurance (NHI) bill that aims to provide universal health coverage to South Africans, although he did not give a time frame.

The bill, which will be implemented in stages at a cost of billions of dollars, is waiting for Ramaphosa's approval after it was passed by lawmakers last year.

"It is a matter of time," he told journalists in Cape Town, without providing further details.

The law aims to provide healthcare to millions of poorer citizens in a major overhaul of a two-tier system, which still reflects deep racial and social inequalities three decades after the end of white minority rule.

It has been strongly opposed by business groups which say it will lead to disinvestment in the healthcare sector and damage South Africa's already fragile economy.

Business Unity South Africa (BUSA) and Business for South Africa (B4SA) said earlier this month that they supported moving towards universal health coverage but had reservations about the bill's "design and implementation," calling for it to be sent back to parliament for amendments.

The bill is popular among voters as South Africa heads into a competitive election year, but concrete changes are unlikely to come soon even once it is signed, analysts say.

"It will get bogged down in court for years," said Louw Nel, senior political analyst at Oxford Economics Africa.



Source: Reuters

10X Investment Consultant Brett Mackay said that instead of cashing out all retirement savings in a lump sum, living annuities protect individuals by allowing them to draw a monthly income.

This protects one’s capital while ensuring that the bulk of the money can keep growing over the long term.

In some cases, it is possible to cash out one’s entire retirement savings that they have saved throughout their career, with the intention of using this fund for the rest of their lives.

That said, being able to cash out the bulk of your retirement investments at 65 creates a false sense of security as the value is seen as incredibly high, making it tempting to spend too much of the cash too quickly.

It is crucial to remember that people are living longer these days, meaning that money has to stretch longer.

Living annuity pros

“One way to get the most out of your investments and sweat this asset is to draw down what can be viewed as a monthly salary, leaving your capital to continue growing,” said Mackay.

“This is a living annuity into which your retirement savings are paid. It also means that the bulk of your money gains at a tax-free rate, although what you cash out monthly will be taxed as if it were a monthly income.”

The Association for Savings and Investment South Africa (Asisa) said that South African retirees had R625.9 billion of their retirement savings invested in living annuities at the end of 2022 – a 47.3% from 2018.

Living annuities offer the choice of pulling out between 2.5% and 17.5% of a fund’s value each year, with the option of an upfront payment, quarterly, bi-annually or monthly payment.

That said, careful planning is required to ensure that the lump sum lasts as long as possible.

If one pulls out the maximum of 17.5% each year, the value of their capital will be eroded.

“Living annuities are not considered part of the deceased estate as long as there are nominated beneficiaries – which allows the investment to go directly to loved ones named as heirs,” said Mackay.

“Your heirs have the option of taking the living annuity investment out as a lump sum or continuing to draw down monthly, but they need to bear tax implications in mind.”



Source: BusinessTech