With the 2015 tax year end fast approaching, the 28th of February 2015, it is a very important exercise to make sure that you have contributed the maximum allowed amount to your Retirement Annuity (RA) investment that is possible as you can reap significant tax advantages by making these additional contributions before the tax year end. There are two main advantages to consider.
The first advantage is that all the contributions that are allowed to your RA will reduce your taxable income, sounds wonderful doesn’t it? This means that you will effectively owe Mr. SARS less money in taxes which may ultimately mean that you receive a higher tax refund when doing your return (it may be a prudent idea to use this refund as part of your next contribution to your RA).
The second advantage is that any money accumulated within your RA does not get taxed in terms of Interest Income, Capital Gains Tax and Dividend Withholding Tax, which gives you a great advantage in the long run when compared to investments that will be taxed.
It would certainly be a smart move to contact your financial advisor to discuss your additional contributions before tax year end as now is the time to take full advantage of the tax deductibility of your RA and maximise your savings benefits! Not to mention, who would not want extra peace of mind for your retirement nest egg?
Always ensure that you discuss your intentions with a professional financial advisor, it is always important to receive professional recommendations when dealing with your personal wealth management.