INVEST

This investment plan allows you to save for your retirement over a long period of time. It is designed to provide a regular income to retirees and are usually established several years in advance. Retirement annuities offer significant tax benefits as compared to other investment options, which encourages people to save more for their retirement.

Tax-free unit trusts are investments that are held over a medium to long-term period. The interest, dividends and capital gains generated from these investments are tax-free, which means that your investment can potentially grow faster than if you had invested in a taxable vehicle. You are allowed to contribute up to R36,000 per tax year and up to a lifetime total of R500,000.

An endowment allows you to access a range of funds for medium-term investments. This savings vehicle requires a minimum investment period of five years and provides considerable tax benefits for individuals in terms of both income and capital gains. Typically, endowments are chosen for tax and estate planning purposes.

These products enable you to invest two-thirds of your pension, pension preservation or retirement annuity when you retire. A living annuity allows you to choose an annual income drawdown percentage between 2.5% to 17.5%. A life annuity, permits you to secure a pre-determined monthly income for the rest of your life. Each option has its own benefits, and the one you select depends on your individual circumstances and needs.

A unit trust is a type of investment that combines your money with the money of other investors. They can help you achieve most of your financial goals, from saving for longer-term needs, to meeting your shorter-term objectives, and are ideal for those who want to have direct access to the money invested.

Pension and provident funds are workplace-based retirement plans that companies can offer as a benefit to their employees. These funds receive regular contributions from both you and your employer. Prior to 1 March 2021, provident funds allowed you to take the entire sum as cash, which was taxable. However, provident funds are now more similar to pension funds, and the rules have changed accordingly.