TFSA vs RA: Which one is better for you? A simple comparison.

Herewith a very simple comparison between a Tax Free Savings Account and a Retirement Annuity. Keep in mind, the TFSA has tiny limits (capped at R30k per year in inception 2015 and R500k over your lifetime), whereas a RA can be a much more substantial investment. Why not have both?

Product Tax Free Savings Account Retirement Annuity
Contributions   Not tax deductible   Tax deductible
Growth   Tax-free   Tax-free
Withdrawals   Tax-free   Taxable
Estate duty   Taxable   Tax-free
Safe from creditors   No   Yes
Access to funds   Anytime   Only from 55

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll Up