Also known as a TFSA, it’s a Long-term savings vehicle for maximum financial benefit
Tax-free Savings Account
Also known as a TFSA, this is a long-term savings vehicle for maximum financial return.
What is it?
Why do you want one?
All proceeds earned from a TFSA are exempt from tax. These include:
- Interest income
- Capital gains
This means you’re not taxed on the growth you earn and you get your full investment return.
Important to note
- Contributions to a TFSA are not tax deductible like a retirement fund.
- Annual contributions have been increased to R36 000 per year
- Lifetime limit remains at R500 000
- If you do not use your annual contribution of R36 000 in the tax year, you cannot carry it to the next year and the contribution will be forfeited
Do you need it?
TFSA’s are not for everyone. First ensure that you are maximising your tax-deductible contributions such as a registered retirement fund, like an RA or employer pension fund. The tax benefits on these outweigh a TFSA. You want to asses the following to see if you should get a TFSA:
- Investment goals
- Investment horizons
- Debt levels
How much does it cost?
Fees will vary by provider but most insurers, LISP platforms, banks and unit trust companies offer TFSA’s.
How can we help you?
We can help you formulate a plan to maximise your money and make it easy, accessible and attractive.