Look after your future self with the JSE’s tax-free savings account
This festive season avoid the over spending rush and invest with a tax-free savings account
Johannesburg, 2 November 2016: Thinking and planning for your retirement when you are in your early twenties while still getting to grips with the reality of your first job can be a daunting task. But think of it like this way: if you don’t save for your retirement early enough, you are robbing your future self - today - of a comfortable life in years to come. The good news is that there is an easy way to save towards your retirement.
Mpho Ledwaba, Head of Marketing at the JSE, says, “The government introduced tax-free savings accounts (TFSAs) in March last year to help people save more easily, and one of the ways you can use a TFSA is to save simply and easily for your retirement. The power of compound interest over decades means it is easier to reach your retirement goal by starting to save smaller monthly sums of money in your twenties than by starting later and then needing to save larger monthly sums. So in this scenario, saving a monthly amount towards a TFSA can help you save towards your retirement very simply using relatively small amounts.
“However, if you haven’t yet started saving towards your retirement, you can also use a tax-free savings account to start playing catch-up. This is because you can use a tax-free savings account to save either with regular monthly amounts, or with a lump sum. There are terms and conditions on your annual limits but the great thing is that you won’t pay tax on the interest or returns earned.”
A TFSA is an account that provides tax benefits for saving, and the JSE TFSA provides investors with a way to invest in Exchange Traded Funds (ETFs). ETFs are ideal for first-time investors looking to invest in the stock market as they provide a ‘basket’ of JSE-listed shares by tracking a particular stock market index, such as the FTSE JSE Top 40.
The JSE affords many more options to potential investors than just TFSAs – for instance, the JSE runs the annual JSE Investment Challenge
, intended to increase understanding about financial markets amongst high school learners and tertiary students. The JSE also facilitates Power Hour sessions which are targeted at investors who are already invested in the JSE, but also looking to improve their knowledge of financial markets. For those who will like to get in-depth knowledge about the running of the exchange and the different products, the
online learning modules
are ideal for getting this knowledge at the comfort of your own home.
The JSE is committed to making the exchange more accessible. “Whether it be saving for your financial future; participating in the Investment Challenge or Power Hour sessions, our intention is to ensure that South Africans establish a culture of investing. Investing need not be a daunting task. We hope to make investing easy and more affordable for all South Africans,” says Ledwaba.
Key features of the JSE Tax-Free Savings Account
Investors are allowed to invest up to R30 000 per annum in monthly payments and limited to a R500 000 lifetime contribution.
Investors invest in one of the JSE-listed Exchange-Traded Funds (ETFs) which provide diversification by buying into a basket of JSE-listed investment products.
You have the flexibility to either contribute monthly or as a once-off lump sum depending on your needs (limits apply).
No Dividend Withholding Tax on dividends earned.
No Capital Gains Tax.
No Securities Transfer Tax on purchases.
As the JSE is not qualified to offer investors financial advice, the exchange has partnered with an array of stockbrokers who can provide tailored financial advice for each investor’s investment journey. To find out more, please visit:
ABOUT THE JSE
The Johannesburg Stock Exchange is based in South Africa where it has operated as a market place for the trading of financial products for 130 years. It connects buyers and sellers in equity, derivative and debt markets. The JSE is one of the top 20 exchanges in the world in terms of market capitalisation and is a member of the World Federation of Exchanges (WFE). The JSE offers a fully electronic, efficient, secure market with world class regulation, trading and clearing systems, settlement assurance and risk management.
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