Recently moved back to SA. Need to optimise a monthly savings budget.

[geekgrl76]

Dear ZA PF Community

I’ve recently moved back to Cape Town, to work remotely for a European-based company. I have around R20k per month I would like to invest to maximise tax deductions, whilst (naturally) getting the best growth possible on the capital.

I currently contribute to my companies pension fund at the maximum matched rate. There are no other retirement savings made.

Currently thinking about putting these in an All-World ETF on Easy Equities or buying RSA retail bonds, as I will need access to the funds in the mid to long term if we decide to return to Europe.

Let me know if I should be following another strategy. Cheers,

 

[ethan46]

@geekgrl76 The only real tax deduction you're getting will be with an RA/Pension. Obviously max out your tax free (world etf) and then, honestly, invest offshore for your taxable/discretionary funds. Edit: from what I been told, over the long term the currency weakening offsets the exchange rate you pay taking money offshore. And you save if you ever want to take more than X million out the country one day, cos its already there.

 

[mentallydiseasedapostate]

@geekgrl76 If the maximum contribution you’re making is 27.5%, then it’ll be pointless to dump the 20k pm into another retirement vehicle because there won’t be any tax benefit for that year (the benefit will call over to the next year). I would suggest taking that money and investing it into a global equity fund/world etf etc. however if you’re contributing less than 27.5% at your company then it would be advisable to open your private RA and contribute to make up the difference till 27.5% of your annual limit is reached

 

[soberarthur]

@geekgrl76 Hi OP

There is more that you can do from a tax deduction perspective outside of an RA.

It will depend how your employment agreement is structured and your capabilities to keep funds offshore without it coming back to SA.

I would however strongly advise against DIY’ing it.

There are a handful of really proficient offshore structuring institutions in SA whom can guide you.

Not sure of the marketing guidelines of this sub, but happy to give you a couple of names.

 

[boateng]

@geekgrl76 You're allowed a tax free investment of 30k Per annum. use thst first

 

[vancouverguy]

@boateng R36k