[{"data":1,"prerenderedAt":249},["ShallowReactive",2],{"lesson-\u002Flessons\u002F3-retirement":3,"lesson-next-\u002Flessons\u002F3-retirement":133},{"id":4,"title":5,"body":6,"description":96,"duration":97,"extension":98,"meta":99,"navigation":100,"order":101,"path":102,"quiz":103,"seo":129,"sitemap":130,"stem":131,"__hash__":132},"lessons\u002Flessons\u002F3-retirement.md","Lesson 3: Retirement & the RA",{"type":7,"value":8,"toc":88},"minimark",[9,13,18,26,29,33,36,56,59,63,71,75],[10,11,12],"p",{},"Retirement feels irrelevant at 25. That's exactly why the maths works so absurdly well at 25.",[14,15,17],"h2",{"id":16},"the-deal","The deal",[10,19,20,21,25],{},"Retirement contributions — pension, provident fund, or your own RA — are ",[22,23,24],"strong",{},"deducted from your taxable income",", up to 27.5% of income (max R350,000\u002Fyear). SARS effectively pays part of every contribution at your marginal rate: at 26%, a R1,000 contribution costs you R740. At 41%, it costs R590.",[10,27,28],{},"The trade: the money is locked away, and withdrawals at retirement are taxed — usually at a lower rate than you paid while working. You're arbitraging your own tax rates across time.",[14,30,32],{"id":31},"the-two-pot-system","The two-pot system",[10,34,35],{},"Since September 2024, contributions split automatically:",[37,38,39,50],"ul",{},[40,41,42,45,46,49],"li",{},[22,43,44],{},"One-third → savings pot",": withdrawable ",[22,47,48],{},"once per tax year"," (min R2,000), but taxed at your marginal rate — an expensive break-glass option.",[40,51,52,55],{},[22,53,54],{},"Two-thirds → retirement pot",": locked until retirement, must buy an income when you get there.",[10,57,58],{},"The system exists because people used to cash out entire pensions when changing jobs. Best practice: pretend the savings pot doesn't exist.",[14,60,62],{"id":61},"why-starting-early-is-cheating","Why starting early is cheating",[10,64,65,66,70],{},"Compounding is exponential: money invested at 25 has ~40 years to double, and double, and double again. A rough rule — every R1 invested in your twenties does the work of R3–R4 invested in your forties. The person who saves R1,500\u002Fmonth from 25 to 35 and then ",[67,68,69],"em",{},"stops"," often retires with more than the person who saves R1,500\u002Fmonth from 35 to 65.",[14,72,74],{"id":73},"your-move","Your move",[10,76,77,78,81,82,87],{},"If your employer offers a fund with a ",[22,79,80],{},"match",", take every rand of it — it's a guaranteed 100% return. Beyond that, see what a contribution would do to your tax in the ",[83,84,86],"a",{"href":85},"\u002Ftools\u002Fra","RA calculator",".",{"title":89,"searchDepth":90,"depth":90,"links":91},"",2,[92,93,94,95],{"id":16,"depth":90,"text":17},{"id":31,"depth":90,"text":32},{"id":61,"depth":90,"text":62},{"id":73,"depth":90,"text":74},"How retirement saving actually works in South Africa: the tax deduction, the two-pot system, and why starting early is unfair (in your favour).","5 min","md",{},true,3,"\u002Flessons\u002F3-retirement",[104,113,121],{"question":105,"options":106,"answer":111,"explanation":112},"How much of your income can you deduct through retirement contributions?",[107,108,109,110],"10%, capped at R100,000 a year","27.5%, capped at R350,000 a year","50%, uncapped","Retirement contributions aren't deductible",1,"Up to 27.5% of taxable income or remuneration, capped at R350,000 per year — across pension, provident and RA contributions combined.",{"question":114,"options":115,"answer":90,"explanation":120},"Your marginal tax rate is 26%. What does a R1,000 RA contribution really cost you?",[116,117,118,119],"R1,000","R1,260","About R740","Nothing","SARS effectively refunds your marginal rate: 26% of R1,000 is R260 back, so the contribution costs you about R740.",{"question":122,"options":123,"answer":111,"explanation":128},"Under the two-pot system, new contributions are split:",[124,125,126,127],"Half accessible, half locked","One-third to a savings pot you can tap once a tax year, two-thirds locked until retirement","Everything accessible any time","Everything locked until age 65","One-third goes to the savings pot (withdrawable once per tax year, taxed at your marginal rate), two-thirds to the retirement pot, locked until retirement.",{"title":5,"description":96},{"loc":102},"lessons\u002F3-retirement","dP6nmaZt5jbL5EvAAUsquurdhSIAAUsEkes0DqQCqt4",{"id":134,"title":135,"body":136,"description":215,"duration":97,"extension":98,"meta":216,"navigation":100,"order":217,"path":218,"quiz":219,"seo":245,"sitemap":246,"stem":247,"__hash__":248},"lessons\u002Flessons\u002F4-insurance.md","Lesson 4: Insurance that matters",{"type":7,"value":137,"toc":209},[138,141,145,148,175,179,186,190,202,206],[10,139,140],{},"Insurance is the least exciting part of money — and the part that decides whether one bad day undoes everything else you've built.",[14,142,144],{"id":143},"insure-catastrophes-not-inconveniences","Insure catastrophes, not inconveniences",[10,146,147],{},"The principle: insure what you cannot afford to replace. A cracked phone screen is annoying; three decades of lost salary is catastrophic. Rank by damage:",[149,150,151,157,163,169],"ol",{},[40,152,153,156],{},[22,154,155],{},"Your ability to earn"," — disability\u002Fincome protection. At 25, your future earnings are worth tens of millions of rand. This is your biggest asset, and it's uninsured by default.",[40,158,159,162],{},[22,160,161],{},"Your health"," — medical aid or hospital plan, so a car accident doesn't become a R500,000 bill.",[40,164,165,168],{},[22,166,167],{},"Your stuff"," — car and household insurance (car insurance is effectively mandatory if financed).",[40,170,171,174],{},[22,172,173],{},"Your life"," — life cover matters when someone depends on your income. No dependants, no rush.",[14,176,178],{"id":177},"check-what-you-already-have","Check what you already have",[10,180,181,182,185],{},"Many employers bundle ",[22,183,184],{},"group life and disability cover"," into the retirement fund. Your benefits statement tells you how much. This is the cheapest cover you'll ever get — know it before you buy anything privately.",[14,187,189],{"id":188},"the-medical-aid-gap","The medical aid gap",[10,191,192,193,196,197,201],{},"Even good medical schemes pay at \"scheme rate\", while private specialists can lawfully charge several times more. The difference is your bill. ",[22,194,195],{},"Gap cover"," — a separate policy costing a few hundred rand a month — exists purely to pay that shortfall. If you're on any medical scheme, it's worth understanding (",[83,198,200],{"href":199},"\u002Flearn\u002Fgap-cover-basics","gap cover basics",").",[14,203,205],{"id":204},"keep-it-boring","Keep it boring",[10,207,208],{},"Insurance products in South Africa can get complicated and commission-driven. The young-professional basics are simple: employer benefits first, hospital plan + gap cover if you're buying your own, income protection as earnings grow. Anything fancier deserves a registered adviser and hard questions about fees.",{"title":89,"searchDepth":90,"depth":90,"links":210},[211,212,213,214],{"id":143,"depth":90,"text":144},{"id":177,"depth":90,"text":178},{"id":188,"depth":90,"text":189},{"id":204,"depth":90,"text":205},"Group life, disability cover, medical aid and gap cover — which protections actually matter when you're young.",{},4,"\u002Flessons\u002F4-insurance",[220,228,236],{"question":221,"options":222,"answer":111,"explanation":227},"For most young professionals, the most valuable insurance is:",[223,224,225,226],"Cellphone insurance","Income protection \u002F disability cover","Funeral cover for yourself","Travel insurance","Your income is your biggest asset — decades of future earnings. Losing the ability to earn is the catastrophe worth insuring first.",{"question":229,"options":230,"answer":90,"explanation":235},"What does gap cover do?",[231,232,233,234],"Replaces medical aid","Pays your premiums when you can't","Covers the shortfall when specialists charge more than your medical scheme pays","Covers dental only","Specialists in private hospitals can charge several times the scheme rate. Gap cover is a separate, cheap policy that pays that difference.",{"question":237,"options":238,"answer":243,"explanation":244},"Your employer likely already gives you some cover through:",[239,240,241,242],"Group life and disability benefits attached to the pension fund","Automatic car insurance","A government scheme","Nothing is ever included",0,"Many employer retirement funds include group life and disability cover. Check your benefits statement before buying duplicate cover.",{"title":135,"description":215},{"loc":218},"lessons\u002F4-insurance","hMYpoVPEYOzfKlcuZpuyQlrsnC_2nHHCtFIPRqxZtH8",1785421697548]