Join Sarel Snyman: Head of Sales and Vaughan Henkel: Head of Equity Research from PSG Wealth and learn more about current trading activities. #tradewithpsg
Date of recording: 26 January 2023

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The information in these videos provided as general information. It does not constitute financial, tax, legal or investment advice and the PSG Konsult Group of Companies does not guarantee its suitability or potential value. Since individual needs and risk profiles differ, we suggest you consult your qualified financial adviser, if needed. PSG Wealth Financial Planning (Pty) Ltd is an authorised financial services provider. FSP 728….(read more)

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Introduction:

Planning for retirement is a crucial aspect of one’s financial journey. Retirement annuities and tax-free investment plans are two popular investment vehicles that offer individuals a means to secure their financial future. PSG, a renowned financial services company, provides a range of investment options including retirement annuities and tax-free investment plans. In this Q&A article, we will explore the various aspects of these investment plans and learn more about their benefits.

Q1: What is a retirement annuity (RA)?

A retirement annuity (RA) is a long-term investment vehicle designed to provide individuals with a stable income during retirement. Contributions to the RA are tax-deductible, which means investors receive immediate tax benefits. The funds accumulated in the RA grow on a tax-free basis, and individuals can receive a predetermined portion of this investment as an income when they retire.

Q2: Why should one invest in a retirement annuity?

Investing in a retirement annuity ensures a secure financial future. It allows individuals to save for retirement while enjoying tax benefits. With an RA, individuals can optimize their retirement savings and benefit from the compounding effect over the long term. Additionally, by investing in an RA, individuals are protected from making impulsive financial decisions as the funds are locked until retirement.

Q3: What are the benefits of a tax-free investment plan?

A tax-free investment plan is an investment option that allows individuals to invest a portion of their income without paying tax on the growth or income generated by these investments. This means that the returns earned are completely tax-free. This allows individuals to maximize their investment return potential and grow their wealth over time.

Q4: Can one invest in both a retirement annuity and a tax-free investment plan?

Yes, it is possible to invest in both a retirement annuity and a tax-free investment plan. These investment options complement each other by providing individuals with different benefits. The retirement annuity provides tax-deductible contributions and a stable income stream during retirement, while the tax-free investment plan allows for tax-free growth and income generation.

Q5: Is there a limit to how much can be invested in a retirement annuity?

Yes, there is a limit to the amount that can be invested in a retirement annuity. The annual limit is currently set at 27.5% of an individual’s taxable income or remuneration, up to a maximum of R350,000 per year. This limit ensures that individuals do not rely solely on tax deductions for their retirement savings while promoting a sustainable level of contributions.

Q6: Are there any restrictions or limits on tax-free investment plans?

Yes, tax-free investment plans have certain restrictions and limits. Individuals can invest up to a maximum of R36,000 per tax year or R500,000 over their lifetime in these investment plans. It is important to note that exceeding these limits may result in tax implications.

Conclusion:

Investing in a retirement annuity and a tax-free investment plan are excellent strategies to secure your financial future. PSG, with its expertise in financial services, offers individuals the opportunity to invest in these plans while benefiting from their tax advantages. By planning and investing wisely, individuals can ensure a comfortable retirement and long-term wealth growth.

Q&A: Trading with PSG – Retirement Annuity and Tax-Free Investment Plans appeared first on Inflation Protection.