R35-billion withdrawn from the two-pot retirement system
Since the two-pot retirement system kicked in, the South African Revenue Service has confirmed that R35-billion has been withdrawn.
Millions of South Africans have already withdrawn from the two-pot retirement system.
According to a report by the South African Revenue Service, as of 18 November 2024, 2,153,942 directive applications were received and a total of 1,914,306 directives issued with a total gross value of R35,052,572,876.62.
However, some claims were declined due to reasons such as 'systems failures from the fund management entities to wrong identification number, wrong tax number, etc.'.
President Cyril Ramaphosa signed the two-pot retirement bill into law in July.
The new law allows citizens to withdraw some of their retirement funds.
"From the proposed date of 1 September 2024, one-third of retirement contributions will be split into a savings component and two-thirds into a retirement component. What is in the 'savings component' will be available for withdrawal at any time before retirement. The ability to unconditionally access amounts from the "savings component" will be provided without the member having to cease employment or having to resign. A member will be allowed to make a single withdrawal within a year of assessment. The minimum withdrawal amount is R2 000. The ability to withdraw from the 'savings component' will be applicable on a per fund or per contract basis," said Presidency spokesperson Vincent Magwenya.
READ: ATM wants two pot system reconsidered
However, financial experts have warned South Africans not to rush to withdraw their retirement funds as this might negatively impact their financial outcomes in retirement.
The other disadvantage of withdrawing from the two-pot system is that withdrawals are taxed at your marginal rate, potentially leading to a hefty tax bill.
For those who still want to withdraw from the two-pot retirement system, use the calculator to see how much you will get: Two-pot retirement system calculator: How much you will get out.
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