So in the wonderful budget, the allowance for contributions to an annuity (Individual pension plan) were increase to $25,000 for tax deduction benefits.
So I decided to take a look around.
All the insurance companies are front end charging.
i.e. on average they are taking 40% of contributions made in the first year.
So what does this mean. Well if you were thinking of taking out a new annuity in order to take advantage of the increase tax deduction like me, it is worth your while to start from now and only take the $12000 for the first year still, collect your tax return for 2007. Then increase your contribution to $25000 in October 2008 so that you will only pay 25% in charges.
As it is it is pretty disgusting that in the first instance you are actually paying the insurance companies more than the tax benefit in the first year.
Also the returns are not that great. You can get better returns on some of the mutual funds being offered.
Altamer
3 months ago
1 comment:
Note to self.
Those funds have decreased by half, need to get some ratio in capital security.
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