A retirement annuity is a tax-efficient savings plan towards your retirement.

Contributions are tax deductable

To promote the need to save for one's retirement, SARS allows contributions to a retirement annuity to be tax deductible up to certain limits. This allows money saved into one being used to reduce the tax an individual owes each year and generally results in a tax refund to individuals for the tax year it is contributed in.

Investment growth is tax free

There is no income tax, capital gains tax or dividends withholding tax on the returns earned in the fund while you are saving. As an investment into a retirement annuity is generally longer term in nature the significance of this benefit is multiplied and helps create more investment grow in your portfolio.

Tax free pay-out at retirement

Upon retirement one third of your retirement annuity fund may be paid out in cash, of which a portion may be received tax-free.