How to invest R30m tax-free

FINANCIAL SECURITY: GUIDE THROUGH POTENTIAL TAX-EFFICIENT OPTIONS IN, OUTSIDE SA

- Pedri Reyneke

As a 67-year-old, where and how can I invest R30 million tax-free while drawing down the maximum interest and principal [amount]? And what amount can I draw until I reach zero principal in 15 years? The investments do not necessarily have to be limited to SA.

Dear reader,

Investing R30 million tax-efficiently while drawing down interest and principal over 15 years is a great way to ensure financial security in retirement. I'll guide you through some potential tax-efficient options within and outside SA and calculate how much you could withdraw over 15 years.

1. Tax-free savings accounts (TFSAs)

In SA, TFSAs allow you to invest without paying tax on interest, dividends, or capital gains, but there are limits:

> Lifetime contribution limit: R500 000; and

> Annual contribution limit: R36 000.

Given the limits, you could place R36 000 into a TFSA annually to take advantage of the tax-free benefits. However, this will only make a small portion of your R30 million tax-free.

2. Non-compulsory living annuities