WellSpent is pleased to present the Tax Free Savings Accounts Q & A Series.
We love tax free savings accounts and, given the many advantages of TFSA’s, we would like to see more South Africans using this type of investment vehicle.
We know from research that as South Africans we are not very good at savings. Reasons for that may be attributed to a lack of understanding of where to save. TFSA’s are one of the savings vehicles available to all South Africans and are one of the simplest, most accessible investment vehicles available to us.
So we asked some questions
We asked a few questions about TFSA’s and collected answers from some clever people, experts in the world of wealth generation, so that we can share the knowledge with you. Over the next few articles we would like to share some expert feedback with you so that you can work out for yourself if a TFSA is for you or your family.
Who’s answering the TFSA questions?
We were privileged to receive feedback from
- Shaun Williams of Avior Wealth Services; and,
- Jan van der Merwe, head of Actuarial and Product at PSG Wealth.
Tax Free Savings Accounts – The Questions
Here are the TFSA questions we put to the experts:-
- Who should be using TFSA Accounts?
- If I have a Provident Fund, why would I need a TFSA?
- If I have an RA, why would I need a TFSA?
- Should I open a TFSA for my child?
- If I open a TFSA for my child can I prevent them from drawing down?
- What happens to my TFSA when I reach the maximum allowable life-time contribution?
- Is it likely that the maximum allowable contribution, monthly and annual, likely to change?
- What is the maths? If I start a TFSA for my child at 15 and I contribute for 15 years (max per month) what would the expected value be?
- What investment risk-profile would be best for a TFSA (Conservative, moderate, high-risk)?
- Does it matter which TFSA provider I choose?
- What fees should I expect when I use a TFSA?
- Are TFSA important savings vehicles given the South African economy and savings landscape?
- Are there ‘better’ investment vehicles available for discretionary savings?
We trust that the information we have provided is helpful and we would encourage you to engage with us, through our social-media accounts or contact us here if you require any additional information.
The WellSpent Editors.