Q: I recently looked at my retirement annuity and admit that I am relatively clueless on the matter. I’m trying to improve my financial literacy by reading books and articles, and listening to podcasts and so on. I read your September 2019 article on the costs of retirement annuity funds (https://www.businesslive.co.za/bt/money/2019-09-22-fee-for-all-what-to-do-about-your-costly-ra/).

I started with my current fund in December 2017  — it was selected by my financial adviser and I’m currently contributing R10,000. I have looked at the effective annual cost (EAC) though and see that over the term, the cost would be 3.3%, which is on the higher side, according to the article. More worrying is that the cost in the first year is 10.5% and 4% after year five. I will speak to my financial adviser about this but wanted some advice from another source. Is it normal for the fees to be this high in the first five years? — Heinrich, via e-mail..

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