Retirement annuities vs tax-free savings accounts: which is the wisest investment ?

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SPONSORED | 10XInvestments highlights how retirement annuities and tax-free savings accounts differ with respect to access to funds, investment allocation limits and withdrawals.

? This makes sense as both products attract generous tax treatments from the government.

“An RA enables individuals to save for retirement in a tax-efficient manner,” says Kelin Pottier, product development specialist at On the other hand, the contributions made to a TFSA can’t be deducted from your taxable income. A taxpayer is allowed to invest R36,000 a year with a lifetime limit of R500,000 into TFSAs.

In addition to the tax deductibility of contributions and their annual caps, the government places restrictions on the allocation of RAs. With TFSAs, though, there are no caps as to where you can invest — even offshore if that’s your thing.

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