Timing is everything
SOUTH AFRICAN expatriates considering an early withdrawal from their retirement savings in South Africa now that the new two-pot retirement fund system is in place, should get their timing right.
There is now a golden window to access your retirement funding—and especially for those who have left South Africa long ago and decided to just keep their retirement ‘parked’ for a later day, the time for action has arrived and procrastination may be very costly.
A favourable exchange rate, the fact that withdrawals from the Savings Pot is immune to the three-year lock-in period which applies to early withdrawal of lump sum benefits of retirement vehicles (including RAs), and one withdrawal allowed in a tax year, can all influence expats’ decisions in this regard.
The two-pot system, which came into effect on 1 September 2024, allows early access to a part of retirement savings from the so-called Savings Pot before retirement age. The rest will be preserved in the Retirement Pot, and is only accessible at the time of retirement.
The Savings Pot of each retirement product has been funded with once off seed capital of R30 000 or 10% (which-ever is the lowest) taken from your retirement savings as on 31 August 2024. Going forward, …
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