Secure your future with a retirement annuity
Prepare for retirement, save on taxes and grow your money over time with a retirement annuity.
Prepare for retirement, save on taxes and grow your money over time with a retirement annuity.
Want to save for retirement and pay less tax now? A retirement annuity helps you do both.
Retirement should be a time to enjoy life, not worry about money. But to get there, you need to start saving early.
A retirement annuity makes it easier by offering 2 big benefits:
A retirement annuity is a smart way to save for your retirement and pay less tax. You put money into a special savings account for retirement, which grows your money over time.
Your savings are protected from people or companies you owe money to (called creditors). Most of your retirement annuity can only be accessed from age 55 onwards. This helps ensure a steady income after you stop working.
You can contribute monthly or make a once-off lump sum payment. The money you put into your retirement annuity reduces the part of your salary that gets taxed. You can claim up to 27.5% of your income each year, with a limit of R350 000. This means you may pay less tax or even get money back from SARS.
Your money grows over time, and you don’t pay tax on the interest it earns or on any profits from your investment. This is thanks to compound interest, where your money earns interest and then that interest also earns interest. Over time, this helps your savings grow even more.
Since 1 September 2024, a new rule called the two-pot system has been introduced for retirement savings. It splits your money into two parts when you contribute:
Example: If you contribute R900, then R600 goes to your main retirement savings and R300 goes to your savings pot.
If you contributed money before 1 September 2024, it stays in the old system, which means you can’t withdraw it early.
When you retire (at 55 or later), you can take up to one-third of your savings as a tax-free lump sum up to R500 000. The rest of your money is used to give you a regular income during retirement.