Speaking before a live audience in Thulamahashe on the Mindset Profits show, financial planner Treasure Khoza argued that many black South African families insure the funeral but not the future. Khoza and host Ntando Maseko covered life cover, retirement savings, tax-free accounts and money habits. What follows separates what Khoza said, which is his opinion and experience, from the tax and retirement rules checked against SARS.
Funeral cover is not the same as life cover
Khoza’s central point is that a funeral policy pays for a burial and does little else. “Most of the time black people are prepared to die because they have funeral covers,” he said, “but they don’t factor much on the life covers.” His own experience drives the view. He lost his father last year and regrets not having taken life cover on him, and he said no inheritance had passed from his grandfather to his father to him. He also said he has four siblings who are fully dependent on him.
“If you have an income and that income perishes the day you perishes, you are not having an income. We’re just surviving.”
Treasure Khoza
He said many black retirees, according to research he did not name, are looking after eight people and so become the ninth person depending on one income. On the sums, Khoza urged people to scale cover to their real obligations. His example was a parent with a bond and two children in private school, a Grade 4 learner and a Grade 2 learner. Cover of “something around 10 million” would, he said, keep them in that school. That was an illustration and his opinion, not a recommendation.
On the guilt many feel about a large payout, Khoza said to change the framing: the money covers responsibilities after a death. “There is life after the death,” he said.
This is general information, not advice. Cover amounts must match your own liabilities, so speak to a licensed financial adviser before choosing a policy.
Self-employed, with no exit strategy
Khoza’s observation from his financial planning work is that self-employed people tend to build everything around the hustle. They have no exit strategy, he said, and his advice was to hold a retirement annuity (RA) even if you work for yourself. No employer deducts a pension from an owner’s income, and We covered a related theme in Vusi Thembekwayo’s five levels of business ownership.
Khoza described the retirement rule as one-third in cash and two-thirds used to buy an annuity. That is broadly right but now has more detail under the two-pot system, in force since 1 September 2024. According to SARS, one-third of new contributions go to a savings component and two-thirds to a retirement component. The savings component can be accessed once a tax year, with a R2,000 minimum, and the withdrawal is taxed at the member’s marginal rate. The retirement component must go towards a pension or annuity. SARS’s lump sum directive guide adds that an RA member can take up to one-third of the non-vested value in cash, plus any remaining savings balance. If the amount that must be annuitised is R240,000 or less (up from R165,000 before 1 March 2026), the whole benefit can be taken as cash.
Khoza’s own calculation was that an RA of R1 million could pay “10 point something” thousand rand a month at 65, and that the buying power of R10,000 would be only about R4,500 in today’s terms. We could not verify those figures, which depend on the annuity type, the drawdown rate and inflation. His wider point stands as his opinion: look at buying power, not the number on the statement. He added that a retiree on that income cannot easily afford a car or medical aid.
The tax-free savings account
Khoza called the tax-free savings account a government break for savers. The rules, from SARS, are that you may contribute R46,000 a year, effective 1 March 2026 (it was R36,000), up to a lifetime limit of R500,000. Returns are free of income tax, dividends tax and capital gains tax, and excess contributions attract a 40% penalty. Spread across several providers, your contributions still have to total no more than the annual limit, as Khoza said. Our guide to tax-advantaged investing sets out how it compares with an RA.
He also relayed a story from a man whose firm runs an investing app that competes with EasyEquities. The man said he maxes out his young children’s accounts every year and estimates each child would have about R15 million by the end of matric, and more than R50 million by 65 if never touched. We could not verify who the man is or his assumptions, and the first figure does not survive a simple check. The R500,000 lifetime limit means R46,000 a year runs out after about eleven years. Our own arithmetic, assuming returns of 8% to 12% a year, puts that money at roughly R1.1 million to R1.7 million at 18, so treat the R15 million as unsupported. By 65 it could grow far larger in nominal terms, but that is a projection, not a promise.
Own the asset, not only the pleasure
Khoza contrasted two parents. He buys his daughter expensive shoes she outgrows within months. A friend, he said, bought a farm worth “around 2 million” when her daughter was turning three months. His reading: one bought pleasure and the other bought the future. That is his illustration, and a farm carries its own costs and risks.
Two ugly conversations
His homework was practical. First, spend a day with your phone off and your bank statements in front of you, read each line, and sort spending into categories to see where the money goes. Second, have “an ugly ugly conversation with your partner regarding money” and be open about finances and habits on both sides. Khoza suggested doing the first monthly and leaving couples to set their own rhythm.
He recalled being the youngest person in a corporate office and carrying a lunch box while a colleague pushed him to buy lunch like everyone else. He kept the lunch box. His reasoning was that small spending holes sink a boat. Asked what happens if a partner refuses, he answered with values: decide which of yours you will not compromise.
Six capitals, and cash comes last
Khoza is writing a book on what he calls buying back your future, built on a concept he credited to his pastor. His framework has six capitals, and he named only some. The first is credibility, which he defined as consistency, such as paying debts and keeping promises. “Money must reach your name before it reaches your pocket,” he said, because then the name is a brand. He told listeners to check their credit scores.
The second is credible relationships, which he described as borrowing trust from people who already have it. He used the biblical story of David and King Saul to argue that talent needs someone to open the door: “sometimes you have good ideas but you’re sleeping hungry.” He urged keeping two or three millionaires in your circle if you want to become one, and passed on advice to stay away from broke people.
The fifth is competence and skill. Khoza compared a security guard and an accountant at the same company, and said “putting more effort without competence you will always labor hard but no result.” He said skills can come from an hour a day of YouTube, TikTok or seminars.
Maseko added a finding from his financial literacy classes with retirees. One of the top three regrets, he said, was this: “I did not learn a skill that kept me relevant after retirement.” He also described losing his cars and house in his early 30s and rebuilding over the next ten years.
Cash is the last capital. Khoza noted that the word currency comes from current, meaning flow, and told listeners to build the flow first. Closing the session, he asked the church to teach the rest of money: “we were taught about the 10% but no one taught about the 90%.”
What it means for business owners
- If you are self-employed, set up an RA or similar retirement saving separate from the business, and know how two-pot affects access.
- Review life cover against your actual debts and dependants, with a licensed adviser.
- Use the R46,000 tax-free allowance, now that the limit is higher, but do not rely on projections such as R15 million for a child.
- Audit your bank statements and talk finances openly with your partner.
- Keep building a skill the market pays for. For surplus business cash, see where South African business owners can invest surplus cash.
