Watch part 2 of Phumelele Ndumo where she covers the newly implemented 2 pot retirement system on INX Prime, DSTV Channel 345.

It’s important to understand the benefits—and potential risks. Under the old system, many South Africans cashed out their pensions when resigning from previous jobs, leaving them financially vulnerable where only 6% could afford to retire financially independent. The new system enforces the preservation of two-thirds of your retirement savings to safeguard your future.

In this interview with INX Prime, Phumelele covers the taxation of withdrawals, the downside of tapping into your savings and she offers alternatives that you can look into for saving money such as offshore tax free investments, and having an emergency fund.

At ThuthukaSA we encourage you to contact us before you make any drastic decisions relating to your pension fund and retirement annuity.

Watch the video here.

Disclaimer: this article provides and overview of the two-pot retirement system and is not intended to serve as legal, tax or financial advice. Please note that the information may change due to legislative updates, different interpretations, or further guidance from SARS. If you have any questions, please feel free to contact us.