The best way to save for retirement | Fin24

The best way to save for retirement

Feb 21 2013 09:59
A Fin24 user wants to know the best salary structure for tax purposes.

FedGroup sales executive Scott Field responds:

Over the past few years, the SA Revenue Service (Sars) has put numerous measures in place to close tax loopholes when it comes to salary structures.

Car allowances and many similar schemes that were previously available as benefits are no longer considered as an opportunity to gain a tax advantage.

Now more than ever, you as a taxpayer need to consider your full financial position when maximising your salary package.

Recent studies indicate that only 6% of South Africans have accumulated enough savings to retire comfortably, so it really makes sense for you to save for your old age as well as cover your current needs out of your monthly salary.

If you decide to save for retirement on your own, you can choose to receive your full salary (which attracts tax) and then save a portion of this money towards retirement.

A more efficient strategy would be to utilise a company pension fund and contribute the maximum amount possible to achieve the tax deductions available in terms of pension savings.

Saving through a company pension fund is the most tax and cost effective way to save towards retirement, as there are no additional commissions or investment fees payable on your contributions.

 - Fin24

Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner. 


Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

investing  |  retirement


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

What is your reaction on Tito Mboweni's announced VAT exempted items?

Previous results · Suggest a vote