Tax Season: Take advantage of your RA & TFSA

Geo Botha • January 27, 2026

28 February marks the end of the tax year.


If you have some extra funds available, this might be the perfect time to consider adding to your savings in a retirement annuity (RA) or tax-free savings account (TFSA), thereby enjoying the significant tax benefits these products offer.


Below are the benefits of both an RA and a TFSA, as summarised by our partners at Ninety-One. As always, please contact your personal financial adviser to assist you in calculating the amount you can still contribute, as well as whether this will be best for your portfolio and personal situation:


Why invest in an RA?


1. RAs can be viewed as gifts from the taxman.

For example, at a 45% marginal tax rate, a deductible RA contribution of R100 000 can generate up to R45 000 in tax relief (within the limits). Tax will be applicable when the funds eventually pay out at retirement, but due to the tax-exempt portion of the lump sum, as well as the tax rebates for individuals over 65 and 75, you may pay less tax at that time.


2. You do not lose your tax benefits, even if you contribute more than the maximum annual tax deduction (excess contributions)

If you contribute more than the maximum (excess contributions), your tax benefit will roll over to the next tax year of assessment. Any excess contributions in subsequent tax years will continue to be rolled over. This means that you could receive a tax benefit at retirement, after retirement, or your beneficiaries could benefit when you have passed away, as explained below.


RA contributions and tax


Before retirement
When contributing to an RA, your maximum tax deduction for the year is the lesser of:

  • R350 000
  • 27.5% of the higher of remuneration or taxable income
  • Taxable income excluding taxable capital gains


At retirement
If you elect to receive a lump sum:

  • The remaining excess contributions will be paid out free of tax
  • R550 000 could be tax-free – if not previously utilised


After retirement
Excess contributions remaining after your retirement are deductible from your compulsory annuity income for tax purposes (section 10C of   the Income Tax Act).


After you pass away
If your beneficiary elects to receive the full death benefit, or a portion thereof, as a lump sum:

  • The remaining excess contributions will be paid out free of tax
  • R550 000 could be tax-free – if not previously utilised


 The tax deduction limit applies to the combined total of RA contributions and all member and employer contributions to workplace pension   and provident funds.


3. You enjoy estate-planning benefits.

  • An RA is exempt from estate duty. Please note that excess contributions may be included for estate duty purposes, to the extent that a lump sum is received.
  • The growth on your excess contributions is not subject to estate duty – you can therefore effectively peg the value of your estate (similar to the benefit obtained from a trust, prior to the introduction of section 7C of the Income Tax Act).
  • Over time, the value of excess contributions could be reduced, which would decrease the potential estate duty payable on these excess contributions.


4. No tax is deducted within the investment (no income tax, capital gains tax or dividend withholding tax).

This means you will benefit even more from compounded growth.


5. You remain disciplined with your retirement savings.

The two-pot retirement regime was introduced on 1 September 2024. This system allows members access to a small portion of their retirement savings before they retire, while preserving the remainder until retirement (unless one of the exceptions specified in the Income Tax Act applies). To achieve this, various notional components within a member’s retirement fund benefit or contract were created.


These components are referred to as:

  1. The Vested Component
  2. The Savings Component
  3. The Retirement Component


Members are able to withdraw from the Savings component once in a tax year. Withdrawals from the Savings component are subject to a minimum of R2 000 per withdrawal and are taxed at your marginal tax rate.


6. You have protection from creditors.

This means your savings for your retirement will be available when you need them.


Key considerations when investing in an RA

  • RAs are subject to Regulation 28 investment limits.
  • On the death of the investor, the Board of Trustees will have full discretion when deciding on a fair allocation of the benefit to dependants and/or nominees, in terms of section 37C of the Pension Funds Act.
  • There are liquidity restrictions prior to reaching retirement age. This means that you will only have access to the funds in the Savings component before reaching the age of 55 (unless you qualify for one of the exceptions).


Why invest in a TFSA?

  • TFSAs are exempt from tax on interest, dividends and capital gains.
  • There are no restrictions on withdrawals; however, if you replenish the funds withdrawn, this will count towards your annual and lifetime contribution limits. For this reason, these investments are generally more suited to long-term investing.
  • TFSAs are a great way to save for your child’s education (be aware of donations tax if the annual exemption of R100 000 per donor is exceeded).


Contributions

  • No matter how many TFSAs you have with different product providers, the total combined value of your contributions may not exceed R36 000 per tax year and R500 000 over your lifetime.
  • If you exceed these contribution limits, a penalty of 40% will apply on the amount contributed above the limit, which will be added to your tax assessment.

Selfontwikkeling is belangrik vir ons menswees

April 29, 2026
Die woord “aftrede” is ‘n skrikwekkende woord wat jou maag laat rondtol. Wat bekommewekkend is die woordjie “stagnasie” – ‘n vrees wat met aftrede geassosieer kan word. Selfontwikkeling is nie ‘n luukse wat slegs vir sekere fases van ons lewenreis gereserveer is nie; dit is ‘n noodsaaklike en lewenslange proses wat die kwaliteit van ons menslike bestaan bepaal. In ‘n wêreld wat voortdurend verander – tegnologies, sosiaal en ekonomies – kan stilstand maklik tot agteruitgang lei. Miskien is selfontwikkeling juis te meer belangrik vir afgetredenes – dit is ‘n proses waardeer alledaagse betrokkenheid en sinvolle gesprek die waarde van jou menslike bestaan inderdaad bevestig, ondersteun en instand hou. Selfontwikkeling dra by tot persoonlike groei en selfkennis. Deur nuwe vaardighede aan te leer, kursusse te volg of bloot oor eie ervarings te reflekteer, leer jy jouself beter ken. Hierdie selfkennis help met beter besluitneming. Iemand wat byvoorbeeld besef dat hy/sy swak is in tydsbestuur, kan doelbewus strategieë ontwikkel om dit te verbeter. Vir jonger mense kan selfontwikkeling help in hulle beroepsloopbane. Deesdae met die spronge in tegnologie, is aanpasbaarheid vir nuwe uitdagings ‘n groot vereiste. Vaardighede wat vandag relevant is, kan môre verouderd wees. Deur voortdurend te leer en aan te pas, bly ‘n persoon mededingend en waardevol, spesifiek ook in jou werksomgewing. Die kern van selfontwikkeling lê in ingesteldheid. ‘n Mens moet nooit glo dat jy “klaar” is nie. Selfs op ‘n hoë ouderdom kan jy nuwe vaardighede aanleer, nuwe perspektiewe ontdek en nuwe verhoudinge bou. Hierdie ingesteldheid verhoed byvoorbeeld dat aftrede ‘n eindpunt word; dit maak dit eerder ‘n nuwe begin.  Wanneer ‘n mens stagneer, verloor jy nie net jou kreatiewe energie nie, maar ook jou vermoë om sin en betekenis in jou daaglikse bestaan te vind. Elke daad van groei is ‘n daad van vernuwing, en hou die gees jonk. Om te stagneer is om jou menswees te verwaarloos; om te groei is om jou menswees te eer. Selfontwikkeling hou die vlam van betekenis aan die brand, en dit is die vlam wat die mens se lewensreis tot die einde toe verlig. Geksryf deur Koos van die Waterberge vir Bovest

Never let a Crisis go to Waste

By Ruvan J Grobler • March 31, 2026
In a quiet corner of a garden, a tiny egg rested beneath a leaf, unnoticed by the world. In time, it hatched into a caterpillar—small, vulnerable, and endlessly hungry. Day after day, it consumed everything in its path, growing rapidly but remaining earthbound, exposed to every passing threat. Then, without warning, it stopped. It found a still place, attached itself to a branch, and formed a chrysalis. From the outside, it looked lifeless—fragile, even pointless. To an observer, it might have seemed like the end of its journey. But inside, everything was changing. The caterpillar was breaking down completely, dissolving into something unrecognizable before slowly rebuilding itself into something entirely new. Time passed. When the chrysalis finally opened, the creature that emerged was no longer confined to the ground. Its wings were soft at first, uncertain. It struggled, pushing fluid through them, strengthening them with effort. Only after this resistance could it take flight. And when it did, it soared—no longer bound by the limitations of its former life but shaped by every stage that came before. It’s been six years since humanity’s last global threat, the Covid pandemic. A lot has changed, but we as people have not. Just as the butterfly in the story above goes through its cycle the global economy does too. But the butterfly does not know its going through this cycle, its merely following its path. We are very aware of the cycle as it has an effect on our every day lives especially on our finances. But just as the butterfly follows its path, we do too. Focus on what you can control. We often stress the issues out of our own control and isn’t exclusive to finances. Not a single person reading this article has any control of the global economy and the current conflict in the Middle East. None of us also knew exactly when it would happen and when it is going to end. Don’t get me wrong, I too struggle to manage my thoughts and emotions when we go through the tough parts. Shifting the focus towards finances; except for being in control of how you earn an income, the only other factor you can control is your spending. Stick to your budget! Never stop investing! Stay disciplined! Crisis Asset Allocation I get many questions on what we are doing to manage risk and potential losses. This is where financial planning becomes extremely important. Every single investment in your portfolio is linked to a need or a goal, not just any goal but a time-based goal. This specific time horizon has influenced the type of assets bought in order to reach these goals. The longer away the goal, the more risk is taken and vice versa. Investments where liquidity is needed will be affected much less than a long-term share portfolio. More liquidity, less risk. Meaning that if you need cashflow you should not be worried as the asset exposure will be less affected. Retirement products will have exposure to many different assets where there are conservative assets to provide protection in the short-term. The growth asset exposure that may be volatile now is the part that gives you the long-term inflation beating returns. During this part of the cycle certain assets have become less desirable and opportunities have popped up elsewhere. All portfolios are monitored to make sure that the original mandate is followed, and the investment goal is reached at the end of the applicable term. All asset managers have started to make asset allocation changes to match the changing of the cycle and the Bovest investment committee has also done so. Is it time to sell and move to cash? In short, no. We don’t know when markets will turn and no one else either. Historically in these crises it takes on average around two weeks to reach the bottom of the market and then more than a month to recover. This does create many buying opportunities for asset managers but also for you as investor. Warren Buffet always says, "Be fearful when others are greedy and greedy when others are fearful" . This is the time to buy assets on “sale”, don’t sell them. Getting out of the market is the biggest risk, this is where investors lose money. Stick to the plan and stay patient, you will be rewarded. Ruvan J Grobler RFP™ (PGDip Financial Planning)