THE BEST OPTION FOR LONG TERM SAVINGS:
As a result of our low savings rate, the government introduced a tax-free savings program in 2015.
It aims to encourage South Africans to save by providing an incentive for them to do so, which is that all proceeds earned, including interest income, capital gains, and dividends – are 100% tax-free.
WHICH LIMITS APPLY?
A tax-free savings account allows you to save up to R500,000 and R36,000 per year over your lifetime. Once you have reached your limit of R500,000, these funds will continue to grow with interest, and the amount you might withdraw in 10 or 20 years, inclusive of all interest, will be tax-free.
As a parent, you may open a tax-free account in your minor child’s name, providing your child with an additional lifetime R500,000 asset. Perhaps you could use this to fund your child’s education, or even to get a head start on saving for retirement.
Withdrawls
Withdrawals from your tax-free savings account are possible at any time, but your limit for life time savings is reduced by the amount withdrawn.
So if you had saved R300,000, but decided to withdraw R100,000, your limit would be R400,000.
Don’t forget to save for the future!
The goal of this option is to save for the long term and to reach the R500 000 limit. Everyone will have different reasons for saving. At this point you will really begin to see the benefits of staying the course.
Start today!
You can start with investing as little as R500 per month.
We often delay saving until such time when we have the money to save when in fact, that day never arrives. But it is never too late or too early to start saving. It is important to start now and take advantage of options like the tax free savings account.
Contact me today to help you set up your tax free savings account, or to review your portfolio.
ryno@louwnet.co.za or 064 533 5339
“Invest for the long haul. Don’t get too greedy and don’t get too scared“
First Investment 