Plan thoughtfully for a secure future

Planning for the year ahead

A strong financial plan sets the foundation for stability, growth, and peace of mind, says Johan Steyn, director at Securitas™ Invest. Whether your focus lies on saving for retirement, funding an education, or building wealth, the decisions you make now can have a lasting impact.

In South Africa, tax-efficient investment options like tax-free savings accounts (TFSAs) and retirement annuities (RAs) are excellent vehicles that can be used to maximise returns and secure your financial future.

Tax-free savings accounts

Tax free savings accounts (TFSAs) are one of the most effective ways to grow your wealth without worrying about taxes. Since their introduction, TFSAs have gained popularity due to the benefits of tax-free growth on one’s investments. South Africans can invest up to R36,000 per year (with a lifetime limit of R500,000) without paying tax on the returns. This means your hard-earned money grows without the bite of capital gains or income tax, giving you more control over your finances.

TFSAs are ideal for achieving medium- to long-term goals, such as saving for a deposit on a home, funding your child’s education, or building an emergency fund, says Steyn. With a range of investment options available, including unit trusts and fixed deposits, TFSAs offer flexibility while ensuring tax efficiency.

Retirement annuities

Another important investment vehicle to consider this year is a retirement annuity (RA). As retirement approaches, it’s crucial to have a well-structured savings plan. An RA not only provides tax benefits – contributions to an RA are tax-deductible up to a certain limit – but also sees to it that your retirement savings are protected for the future.

One of the greatest benefits of an RA is compound growth. This means that the earlier you start contributing, the more your investments grow over time, setting you up for a comfortable retirement. Additionally, RAs are protected from creditors, which offers an extra layer of security for your hard-earned savings.

Responsible financial use in 2025

While the new year often comes with the temptation to spend on luxuries or indulgences, it’s important to remain focused and prioritise responsible financial habits. Start by reviewing your budget and cutting back on unnecessary expenses. Small changes, such as reducing impulse purchases or dining out less, can free up funds for savings and investments.

Ultimately, the setting of realistic financial goals is key. Consider creating a monthly savings plan, automating contributions to your TFSA or RA, and building an emergency fund to handle those unexpected expenses. These proactive steps could not only improve your financial stability, but also provide you with added peace of mind.

Insights for the year ahead

2025 brings with it a new set of challenges and opportunities tied to South Africa’s economic climate. With rising living costs, power outages, water disruptions, and market volatility, the ability to adapt is essential. Financial literacy is an increasingly valuable tool, as it enables individuals to make informed decisions about where and how to invest in these uncertain times.

Employing professional advice is another critical step. Consulting with an experienced financial adviser can help you to uncover opportunities to optimise your savings and investments, particularly in a dynamic economic landscape. They can also assist you in putting together a plan that aligns with your long-term goals.

A strong start to 2025

The start of the new year is an opportune time to take control of your financial future. By leveraging tax-efficient tools like TFSAs and RAs, practicing disciplined financial habits, and seeking professional guidance, you can set yourself up for long-term success.

Every small step count, whether it’s updating your budget, exploring new investment options, or simply committing to spend less and save more. A well-thought-out financial plan can help you weather uncertainties and take advantage of the opportunities that arise.

Here’s to a financially secure and successful 2025!

Securitas™ Financial Group (Pty) Ltd is an authorised financial services provider FSP 6536.