To encourage you to save and ensure a more secure future for yourself and your family, the government grants taxpayers various concessions.
“One of the simple ways you can legally minimise your taxable income (and therefore your tax liability) is to maximise your annual retirement fund contributions,” says Shakira Bodasing, senior legal adviser at Old Mutual. “To make the most of this opportunity, increase your monthly contribution into your company pension or provident fund. If you have the means to do so, you can apply for a retirement annuity and deposit contributions into it.”
The funds that you contribute may be deducted from your pre-tax income. The deduction is limited to 27.5% of the greater of the amount of remuneration for pay as you earn (PAYE) purposes or taxable income (both excluding retirement fund lump sums and severance benefits). The deduction is further limited to the lower of R350 000 or 27.5% of taxable income before the inclusion of a taxable capital gain. It really is a no-brainer — a double win.
You increase your retirement savings and at the same time you decrease what you owe the South African Revenue Service (SARS). Remember always to align your decisions to your long-term financial plan and your family’s needs.
Having a retirement plan in place will help you determine how much you need to contribute to your retirement fund in order to live comfortably during your retirement.
To discuss your options or for more information, contact your financial adviser, call 0860 60 60 60, visit Old Mutual’s website, or click here
Disclaimer: This material is not intended as and does not constitute financial or any other advice. The material does not take into account your personal financial circumstances. For this reason, it is recommended that you speak to an accredited broker or financial adviser to consider all your options and draw up a plan to achieve your financial goals.
Old Mutual Life Assurance Company (SA) Limited is a licensed FSP and life insurer.
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