Year-End Final Reminder


Make the most of your Retirement Annuity (RA) & Tax-Free Investment (TFSA)

As you are aware, Retirement Annuities (RA’s) and Tax-Free Savings Accounts (TFSA) are a great way to save for retirement. If you have not yet maximized your annual contributions to your existing RA’s and TFSA, you may wish to do so as the tax year-end is fast approaching


If you do not have an RA or TFSA in place and would like to set one up, please contact us and we will be happy to assist. You have a small window of opportunity to make the most of the tax benefits offered by these investment vehicles.



The deductibility of contributions to a RA (subject to certain limits) can help ensure that a smaller portion of an individual’s total earnings is taxed by the South African Revenue Service.

Current legislation allows for a maximum retirement fund deduction of the lessor of R350,000; 27.5% of the greater of remuneration or taxable income; or taxable income before the inclusion of any taxable capital gain. Therefore, to calculate the maximum tax-deductible RA contribution, other retirement fund contributions must be considered and deducted from the total maximum calculated.

The subsequent tax saving received in respect of RA contributions can be re-invested in the RA to ensure that the full gross contribution value is employed within the retirement vehicle.




Tax-free savings accounts (TFSAs) were introduced in South Africa in 2015 to encourage individuals who are resident in South Africa to save more. The growth and income received on a TFSA investment are tax free. This means that you are not liable for any capital gains tax (CGT) or income tax on the dividends and interest received on your investment.

Each investor can contribute up to a maximum of R36,000 each tax year as well as R500,000 over the course of their lifetime at which point contributions cease. When TFSAs were originally launched, many investors and advisors underestimated the extent to which the tax benefits on TFSAs would compound over time. This happened because, unlike a retirement fund, the TFSA contribution is not tax-deductible upfront.

TFSAs are a great initiative from government to encourage savings in South Africa and are important financial planning tools which we make use of.