When considering investment vehicles or products to utilise for various savings goals, there are a quite a number of choices.
If you are overweight in your retirement savings, you may not always have access to capital should an emergency arise or the ability to substitute your drawings from a living annuity once you reached the 17.5% drawdown rate cap. Even if you do have access to your retirement savings in certain circumstances like when you move between jobs, it’s rarely a good idea to make a withdrawal at that time.
Tax-free savings accounts are also a great option for long-term discretionary investments, but you are limited to contributions of R36 000 per year. Although you may access these funds at any time, you will lose the long-term tax benefits if you do so.Different administrative platforms have different names for these – unit trust, investment plan, investment portfolio, etc.