Q&A: Saving Millions in Retirement Tax, Reg 28 & TFSA Secrets

Yeah, it's actually quite fascinating.

Financial planning is amazing.

You think of ways and means of how you can add value for clients.

Very often a client will say, what is the fee and so forth.

And very often I always say it's about doing a value audit, working out where you can add value.

And here's an area.

Let's use this as an example.

So if a couple are 65, they've retired, and they need R70,000 a month.

Call it R60,000 for living expenses and R10,000 for Medicaid.

So it's R70,000 after the tax has been paid.

So you work it backwards.

How much would they need to draw if they only have one source of income? Call it one living annuity or whatever.

they would have to draw 100,000 Rand.

So that's 30,000 Rand a month in tax or 360,000 Rand a year.

But if they'd have planned earlier in life, and here we're speaking to the young adults now, here's a really good tip.

If you can build investments in both of your names, then at retirement, you only have to draw 85,000 Rand to pay 15,000 Rand tax to get the same 70,000.

If you take that 15,000 Rand tax saving and you invested that at a 10% return net of fees, over 25 years, that would save you 20 million rand.

And it's a

massive number, right?

It's a

huge number.

I mean, I had to double check it a couple of times.

And here's the thing.

So if you think about it, even if there's only one breadwinner in the family, it's no excuse for only having one source of income because donations between spouses are free of tax.

Yeah.