Managing your retirement fund contributions & investments

Adjusting your retirement contributions doesn’t have to mean sacrificing your monthly budget. In South Africa, even small changes can have a big impact over time. Here’s how to make it work:

1. Start with your employer’s contribution structure

Most pension or provident funds let you choose between contribution tiers (e.g., 5%, 7.5%, or 10% of your salary). Check if your employer matches higher contributions – this is essentially “free money” for your future.

2. Balance tax efficiency with cash flow

• Tax deduction tip: Contributions to retirement funds are tax-deductible up to 27.5% of your taxable income (capped at R350 000/year). Use the SARS tax calculator to see how increasing contributions could lower your tax bill.
• Example: If you earn R40 000/month, contributing an extra R1 000/month could reduce your annual tax by roughly R3 360.

3. Use bonuses wisely

Allocate a portion of your annual bonus to your retirement fund. Even 10% of a R50 000 bonus adds R5 000 (plus compound growth) to your savings.

4. Avoid early withdrawals

Withdrawing from your pension fund before retirement triggers heavy penalties (up to 36% tax). Rather reduce contributions slightly if you’re in crisis.

Next steps

Adjust your contribution percentage in minutes via the Employee Benefits Portal under “Retirement Fund Settings”.