Question 1

What are the TFSA contribution limits?

Accepted Answer

SARS allows R36 000 per tax year and R500 000 over your lifetime. Any contribution above either limit is taxed at 40% as a penalty. The limits are per person, not per account.

Question 2

Can I withdraw and re-contribute?

Accepted Answer

Yes, but withdrawals do not restore your contribution room. If you contribute R36 000 then withdraw R10 000, you've still used R36 000 of your lifetime cap.

Question 3

Are returns really tax-free?

Accepted Answer

Yes — interest, dividends and capital gains inside a TFSA are completely free of South African tax. This makes it one of the most powerful long-term savings vehicles available to individuals.

Question 4

What's the best monthly amount?

Accepted Answer

To stay within the annual cap exactly, contribute R3 000 per month (R36 000 / 12). At that rate you'll reach the R500 000 lifetime cap in roughly 14 years before any growth.

Question 5

Should I use a TFSA before an RA?

Accepted Answer

Generally: max out your RA first for the tax deduction (up to 27.5% / R350 000), then funnel surplus into a TFSA for tax-free growth. Both vehicles are complementary, not competing.

Year	Contributed	Lifetime	Excess	Balance
1	R 36 000	R 36 000	—	R 37 523
2	R 36 000	R 72 000	—	R 78 565
3	R 36 000	R 108 000	—	R 123 458
4	R 36 000	R 144 000	—	R 172 562
5	R 36 000	R 180 000	—	R 226 272
6	R 36 000	R 216 000	—	R 285 021
7	R 36 000	R 252 000	—	R 349 281
8	R 36 000	R 288 000	—	R 419 568
9	R 36 000	R 324 000	—	R 496 450
10	R 36 000	R 360 000	—	R 580 543
11	R 36 000	R 396 000	—	R 672 525
12	R 36 000	R 432 000	—	R 773 135
13	R 36 000	R 468 000	—	R 883 183
14	R 32 000	R 500 000	R 4 000	R 1 003 554
15	R 0	R 500 000	R 36 000	R 1 135 217
16	R 0	R 500 000	R 36 000	R 1 279 231
17	R 0	R 500 000	R 36 000	R 1 436 755
18	R 0	R 500 000	R 36 000	R 1 609 055
19	R 0	R 500 000	R 36 000	R 1 797 518
20	R 0	R 500 000	R 36 000	R 2 003 661

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