The most TAX efficient investment available - act now!
Retirement Annuity top-up contributions.
Utilize your 2025 tax benefit before 28 Feb 2025 – Retirement annuity top-up contributions.
Retirement annuities are the most tax efficient investment product available for individuals to save for retirement. Contributions to retirement annuities qualify for a tax deduction - the cost of your contributions are thus reduced by the amount you save on tax.
Example:
If your tax rate is 35% and you contribute R100,000 to a Retirement Annuity, you are effectively paying R65,000 (R100,000 less tax rate of 35%) for a R100,000 investment for your retirement. This is a return on your investment in the first year of 53,8% (R35,000 ‘growth’ on net capital invested of R65,000). Note that this is only applicable in the year of the contribution.
For the contributions to qualify as a deduction, your total contributions towards pension, provident and retirement funds cannot exceed 27.50 % of your taxable income or gross income, limited to a maximum of R 350 000 per annum.
If you have not utilized the total 27.5% contribution (or R350,000 maximum deduction) for the 2025 tax year, you can do so by making a once-off top-up contribution towards a retirement annuity before 28 February 2025. Doing this ensures you utilize the full available tax benefit for this tax year as unutilized allowances are forfeited – use it or lose it.
The benefits of using a retirement annuity as a tax efficient savings vehicle for retirement are
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You save tax - contributions are tax deductible, meaning you can effectively save more per annum than using other non-tax-deductible savings products
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Any growth within the fund is not taxed - you will have more money available to earn growth for the years up to your retirement
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Your funds in the retirement annuity are protected from creditors
Contact us before 15 February if you would like to make us of this opportunity to maximize your tax benefits by making a top up contribution towards a retirement annuity.
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