South Africa has a negative savings rate*, meaning that each year, fewer people are putting money away for specific life goals. This is due to a lot of reasons: the cost of living is increasing, markets are fluctuating and the global economic outlook is shaped by conflicts and uncertainty.
Your role matters more than ever
Most people don’t know where to start. Advisers guide clients through practical steps like:
- Creating and maintaining a workable budget
- Making smarter financial choices
- Allocating any available savings towards suitable investments
Sound guidance is critical. Few clients know how much they need to achieve their goals or by when. Advisers bridge that gap by showing options and turning ambitions into real, actionable plans.
Building plans with purpose
A good financial plan covers short-term needs, such as emergency funds; medium-term goals, like saving for a vehicle or home deposit; and long-term priorities, such as funding children’s tertiary education. The most essential long-term goal, however, remains the ability to retire with confidence.
With proper planning, retiring comfortably is achievable, yet far too many people struggle to maintain their standard of living once they stop working. This makes professional advice from a trusted financial adviser indispensable.
Explore the most suitable options
The conversation should include solutions that address basic needs, as well as advanced strategies that optimise tax efficiency.
Among these, a retirement annuity remains a popular choice because it encourages consistent investing and offers valuable tax benefits:
- Every tax year, individuals can claim tax deductions on money invested through a retirement fund.
- Deductions are limited to 27.5% of the greater of remuneration for PAYE purposes or taxable income (excluding retirement lump sums and severance benefits).
- The deduction is further capped at the lower of R430 000 or 27.5% of taxable income before a taxable capital gain**.
Tax-free investments, also known as tax-free savings accounts (TFSAs), are another powerful tool to supplement retirement planning. While contributions do not qualify for deductions, growth and withdrawals are completely tax-free. Clients can invest up to R46 000 per tax year, subject to a lifetime limit of R500 000. These limits can change, so ongoing guidance is essential.
Advisers have an opportunity to help clients maximise these incentives, leverage them consistently over time, and optimise portfolios by blending available options. This approach reduces tax impact and increases growth potential, putting clients in a stronger position to achieve their goals.
Momentum Wealth offers a wide range of tax wrappers to help advisers customise investment portfolios for optimal tax efficiency. These products and investment solutions can be tailored to individual needs and circumstances, helping clients build and protect their financial dreams on their journey to success.
Speak to your Momentum consultant or visit momentum.co.za to learn more about Momentum Wealth.
*Source: Financial Stability Review First edition 2025;
** Momentum Tax Guide 2026 2027
Momentum Wealth is part of Momentum Investments and Momentum Group Limited. Momentum Wealth (Pty) Ltd is an authorised financial services provider (registration number 1995/008800/07, FSP number 657). Momentum Metropolitan Life Limited is an authorised financial services and credit provider (registration number 1904/002186/06, FSP number 6406).
