- Saving for retirement
- Retirement annuities
- Alternative solutions
- Pension, provident & preservation funds
- Your risk profile
Saving for retirement
The best time is now
The best time to have started saving for retirement was the day you started working. The next best time to start saving is today! To achieve peace of mind at retirement, knowing you are well positioned financially to maintain your desired lifestyle, we need to lay the foundations as soon as possible.
By utilising your greatest asset, “time”, we are one step closer to fulfilling your hopes and dreams at retirement.
There are various solutions available to you and your current situation which may benefit your retirement planning, all with their own unique characteristics. Each of these should be considered holistically.
Retirement annuities
The benefits of a retirement annuity
Additional benefits of an RA:
- Tax benefit: the cumulative contributions to all retirement funds are tax deductible up to the greater of 27.5% of your taxable income or remuneration, limited to R350,000 per year
- Access on retirement: one-third of the fund can be taken as a lump sum in cash and two-thirds must be used to purchase an income (in the form of an annuity). Alternatively, the funds can be accessed should you pass on or become disabled, dependent on the rules of the relevant fund.
- Tax on proceeds: the lump sum is taxed according to the retirement tax table whilst the income purchased from the annuity will be taxed according to the income tax table
BUILDING YOUR RETIREMENT
Pension and provident funds
The fund values and contributions should be included in your overall retirement plan. Upon resignation from your job, the value of the fund can be preserved to support your retirement goals.
YOUR RISK PROFILE
Why your risk profile matters
An SFP advisor can guide you on your journey to saving for retirement by helping you to first determine your risk profile.
THE TWO-POT RETIREMENT SYSTEM
How the two-pot system works
How the two-pot system is set up
- The savings pot allows limited annual withdrawals, but these are taxed at the individual’s marginal tax rate and should only be accessed in true emergencies
- The retirement pot, which receives two-thirds of all new contributions, is strictly preserved until retirement, helping ensure long-term financial security
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