What is the Two-Pot Retirement System?
The two-pot retirement system allows South Africans to access a portion of their retirement savings in emergencies. One-third of contributions go into an accessible “savings pot” that can be withdrawn at any time, while the remaining two-thirds are allocated to a “retirement pot” reserved for future retirement, ensuring long-term financial security.
To withdraw from the retirement pot, you must be at least 55 years old, and the funds will typically be paid out through a retirement annuity.
When Does the Two-Pot Retirement System Start?
The two-pot retirement system will be implemented in South Africa on 1 September 2024. From this date, all retirement contributions will be divided, with one-third going into the savings pot and two-thirds into the retirement pot.
Why is the Government Introducing the Two-Pot Retirement System?
The government introduced this system to provide South Africans with greater financial flexibility while ensuring their retirement savings are protected. It allows partial withdrawals in case of emergencies while preserving the bulk of the funds for retirement.
