Pinion Wealth SA – FSP 50374
2025 has arrived with a bang, with promises to be the best year yet.
Every year we are bombarded with more and more noise, content, hype, fake news, promises… the list goes on.
As is my message every year, try not let this noise distract you from your goals and dreams, and let’s again focus on the things that are in our control, and not worry about those that aren’t.
Don’t Miss Out!
The run-in to February means that RA season deadlines are looming!
This is the last chance to take advantage of the opportunities available to all of us to make RA and Tax-Free investment contributions to reduce your tax and increase your investments. Please don’t get caught up in the last-minute mayhem and risk missing these cut-off dates. Get your ducks in a row early and make these top-ups to your investments sooner rather than later.
What I love about RA Season is the certainty!
It sets us up for the year ahead with the certainty of a boost to your retirement nest egg and a guaranteed tax benefit. Just like it says on the bottle.
If you don’t act now (see cut-off dates below), it is also certain that you will miss out on the tax deduction for the FYE 2025!
Tax Planning & Retirement Top-Ups
Below is a reminder of the benefits of making retirement annuity and tax-free investment top-ups before the end of February.
Please engage with your accountant or tax practitioner (or us) early and don’t let the opportunity pass you by.
Why Invest in a Retirement Annuity and Tax-Free Savings Account?
Retirement annuities (RAs) and tax-free savings accounts (TFSA) are a great way to save for retirement or a long-term future objective. The earlier you invest in both, the better the end effect on your financial position both now (because of the tax deduction in RA’s) and in your future (due to compounding of the tax-free growth in both RA’s and TFSA’s).
Retirement Annuity
RAs should be used as part of your tax planning for the year. Your financial planner and/or tax practitioner can advise you on the optimum amount to contribute to your RA.
Tax Benefits
For every Rand spent on an RA your tax is reduced. Someone earning R600k per annum would get 36c on the Rand back from SARS. This tax reduction fluctuates from 18c on the Rand to 45c depending on your income level. Chat to us or your tax practitioner if you need more guidance.
An Added Benefit
Since the implementation of the Two-Pot retirement system, you will now have access to 1/3 of your RA investment prior to reaching retirement age. This could perhaps provide further motivation to increase your future contributions, knowing that if push-comes-to-shove, you will be able to access a portion (seek advice here as tax implications do apply).
Tax-Free Savings Account
TFSA’s provide a capped opportunity to invest in a product that attracts no tax whatsoever on the growth of that investment. Contributions are capped at R36,000 a year and R500,000 in your lifetime.
Tax benefits
While you don’t receive an income tax deduction for contributions to a TFSA (i.e. contributions are made with post tax money), you will receive tax-free growth on this investment over the lifetime of the investment. No tax on interest, dividends or capital gains and ZERO tax when you withdraw any amount from the investment.
Cut-Off Times for February Top-Ups!
The different investment houses have different cut-off dates, so please make sure you are aware of what these are, and the documentation required in order to get your Top-ups invested in time.
To avoid disappointment, try to have everything wrapped up prior to Friday the 21st of February 2025, and please keep in touch with us so that we can offer you our assistance in the process.
The team at Pinion Wealth is here to assist you where needed.
Wishing you all a prosperous 2025!
Kind regards
Bruce, Hugh, Leslee & Chaney
bruce.brown@pinionza.com | leslee.marsh@pinionza.com | chaney.patience@pinionza.com
Disclaimer:
The information supplied herein should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact our office for specific and detailed advice. Any legal information presented is a precis of current legislation, is subject to change and should not be used as a substitute for detailed professional advice.
Copyright © 2025 Pinion South Africa. All rights reserved.