What to consider for the best tax-saving option

Here's another look at what the reader above can do with his R4 million: It's important to remember financial planning is nuanced.

- Nelis Brink

Here's another look at what the reader above can do with his R4 million:

It's important to remember financial planning is nuanced. Restricting yourself to a pension fund or an endowment with discretionary money, which has endless investment options apart from the two choices offered, would not be prudent.

Let me answer the question: When deciding whether to contribute an additional R4 million to your existing pension fund or initiate a new endowment policy, it's crucial to consider the tax implications, investment restrictions, and financial objectives.

1. Contributions to pension funds Pension fund contributions are tax-deductible up to the lesser of 27.5% of the greater of your remuneration or taxable income or an annual limit of R350 000.