G and S Insurance Consultants


Anyone who earns an income can use a retirement annuity (RA) to provide for their retirement.

When you take out an RA, you become a member of a retirement fund. You pay contributions to the fund, which are tax-deductible within limits. Your contributions are invested to earn returns that will grow your savings. It also states that when you, as an RA fund member, retire, you are allowed to receive up to one-third of your savings in cash, but you have to buy a pension with the balance.

Why have an RA:
A tax deduction (of up to 27.5% of your salary) for contributions to all retirement vehicles, within certain limits (R350 000).

No tax on growth (including no Capital Gains tax & Dividends Withholdings Tax) is levied on the build-up of your capital.

No estate duty will be levied (Which is 20% of net estate value).
The trustees of your fund will distribute your savings to your dependents and any beneficiaries you nominate at their discretion. If you die without dependents or nominated beneficiaries, the money will be paid into your estate.

Protection against creditors and insolvency in terms of the Pension Fund Act. A creditor can only claim the money if you withdraw a lump sum at retirement and you receive it in your bank account.

Here is how you can calculate your tax deduction:

Take your annual salary R________ and multiply by 0.275 (This is Answer A)
Calculate your tax bracket:

Now take the percentage you determined and shift it two decimals places to the right.E.g. 18% = 0.18 26% = 0.26 41% = 0.41
(This is answer B)Your total deduction:
Take answer A and multiply it by answer B.This final answer will show that if you contributed to an RA, SARS will either give you this amount back in cash or will use this amount to defer tax that you owe them.The maximum amount that is allowed to be deducted annually is R350 000.00.

This is highly beneficially as SARS is helping you to retire better.

This is a great way to boost your retirement savings, the government implemented this legislation to try and better the statistics regarding individuals that are able to retire comfortably and motivate individuals to make use of this investment vehicle.

Contact us today – 011 907 2412 / adelev@gsinsurance.co.za