Ask most South Africans why they haven’t started investing yet, and you’ll probably hear the same answers:
- “I’m too young to worry about that, I’ve got time later.”
- “It’s too late for me now.”
- “I don’t have enough to invest to make it worthwhile.”
These are all understandable feelings, but they’re not facts. The most important thing about investing isn’t how much you start with, how old you are, or how perfectly you time it. It’s simply that you start. If you wait until you are ready or you feel you have enough, you’re going to wait forever.
Here are some useful guidelines for getting your investment journey underway at any point in your life:
Just Starting Out
(20s to early 30s)
Time is your ally when it comes to saving and investing. A simple savings account with a small monthly debit order for a young child or teenager builds the savings and investment habit before it builds the balance.
From there, a tax-free savings solution, whether it’s a tax-free savings account, tax-free fixed deposit, or tax-free unit trust, is arguably the single best long-term investment a young South African can open. Every rand of growth inside a TFSA is completely tax-free, and it compounds year after year.
It’s also vital that you start to build towards the retirement you want while you are still young. Retirement may feel like a distant concern in your twenties or thirties, but those extra decades are precisely what make this the most powerful time to start.
The earlier you invest, the harder compounding works in your favour, turning even modest contributions into meaningful wealth by the time you retire.
The Middle Years
(30s to 40s)
As you hustle through your career, life can get expensive, but this is also the time when earning power peaks for a lot of people. That’s a good opportunity, but also a risk, because every year you put off investing sets you back in terms of how much wealth you can create.
A retirement annuity is a great, tax-efficient way to avoid these delays and get your retirement plan off to a good start.
Contributions to an RA are tax-deductible up to 27.5% of your yearly taxable income (capped at R430,000 per year from March 2026), and growth inside the fund is tax-free, which means that the government is practically paying you to invest for your financial security later in life.
It is also recommended that you run a TFSA alongside an RA as a smart combination, because the RA locks away retirement savings, while the TFSA offers flexible, tax-free growth to cover your other expenses if you absolutely have to, although the golden rule is to leave it to grow for as long as possible.
For medium-term goals like education or a home upgrade, unit trusts are once again a great option, offering good growth potential with more flexibility than an RA.
Put your bonus, your tax refund, or whatever extra funds you have into a TFSA or retirement annuity as often as you can, and future you will be so grateful.
‘I Think I’ve Left It Too Late’
(50s to 60s)
The good news is: You haven’t. South Africans are living longer than they used to. In fact, your retirement years can easily last 20 to 30 years, which means that a TFSA opened at 55 still has decades of tax-free growth ahead of it.
What does change at this stage, though, is risk appetite. You can’t afford to lose money to market short-term downturns, so capital-protected options like fixed deposits that guarantee your initial investment while earning competitive interest are a good choice.
Retirement and Beyond
Most retirees draw income from a living or life annuity, each with different trade-offs around flexibility and income certainty. However, what many overlook is that you don’t have to stop investing and growing your money just because you’ve retired.
A TFSA can continue growing tax-free alongside your retirement income, and even modest contributions made in the early retirement years will keep working and growing for you. Fixed deposits also remain useful for protecting savings from market swings, while still outpacing a transactional bank account.
When it comes to investing at any point in your life, the only wrong move is doing nothing. Whether you’re 22 or 62, the most important thing you can do is to start where you are, with what you have, and let time and consistency do the rest.
WRITTEN BY SISANDILE NKATU
Sisandile Nkatu is a retail investment specialist.
While every reasonable effort is taken to ensure the accuracy and soundness of the contents of this publication, neither writers of articles nor the publisher will bear any responsibility for the consequences of any actions based on information or recommendations contained herein. Our material is for informational purposes.