Should you rather take out a Retirement Annuity or a Tax Free Savings?
Whether you choose to take out an RA or a TFS will ultimately depend on a few factors:
Tax
Goal
Term
Liquidity
Etc
Each having their own Pros & Cons.
I simplified certain factors to avoid unnecessary confusion. With the RA, it is tax deductible up to 27.5% of the greater of remuneration or taxable income.
TFS are not Tax deductible but the growth is tax free. Be careful of the limits. You are limited to R33 000 p.a. or R2750 pm during a tax year and also limited to R500 000 in contributions during your lifetime. If you do contribute more than the allowed amounts, you will be taxed at 40%.
I’m a Certified Financial Planner, should you require more info or advice on what to do. Give me a call or send me an e-mail.
CONTACT US:
Kobus Kühn CFP®
North Financial Services
+27 82 747 7477
info@northgroup.co.za
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DISCLAIMER: I am a Certified Financial Planner and I am licensed to give advice my videos are for the general public and does not constitute as advice to you.
The terminology was simplified to make it easier for more people to understand. Should you require more detail please leave a comment or reach out to me and I can explain it in more detail.
North Financial Services is an authorized financial service provider – FSP nr: 51767…(read more)
LEARN MORE ABOUT: Retirement Annuities
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Hi, I'd like to if, if one invests on a regular basis, is it still necessary to get a retirement fund with a conventional FSP?
Which one of the two options is more tax efficient?
What would you suggest as an alternative to a RA should Government decide to take control of the money in our Retirement to bailout SOE's