Debunking two-pot retirement myths

Myth 1: I’ll have access to all my retirement savings from 1 September 2024. 

When the two-pot retirement system takes effect, retirement fund members will only have access to the money in the savings component. To ensure you are not starting from scratch, 10% of your existing retirement savings as of 29 February 2025, will be transferred into this savings component (or “pot”). 

Myth 2: My entire retirement savings will disappear when the two-pot retirement system kicks in. 

Your existing retirement savings will remain fully protected and unchanged in your current retirement funds. The two-pot retirement system's rules will only apply to future retirement contributions, starting from the proposed effective date of 1 September 2024. 

Myth 3: I can access R30 000 each year from my retirement fund 

You can access the funds in your savings component annually (per tax year – March 1 to February 28) and only if there is a minimum balance of R2000. There is no maximum limit on the amount that can be withdrawn from your savings component. 

Myth 4: Only employee contributions go into the accessible pot. 

The two-pot retirement system will apply to all contributions in your fund, including both employee and employer contributions. 

Myth 5: I will be able to access my retirement savings to enhance my lifestyle. 

The aim of the savings pot is not to access your retirement savings early. Access will only be granted once a year and should be reserved for emergencies, not lifestyle upgrades. Withdrawals from the savings component are taxed at your marginal rate to discourage non-essential use. 

Myth 6: If I resign, I will be able to access all my money in my retirement fund. 

You will not be able to withdraw the amount in your retirement component until you reach your retirement age. Only the money in your vested component, plus your savings component (if you have not taken a withdrawal that tax year), is available for you to withdraw.  

All and any withdrawals are subject to tax. 

Myth 7: I won't pay tax on withdrawals from my savings component. 

Any withdrawals from your savings component will be taxed at your normal marginal income tax rate. 

Myth 8: I must withdraw from my savings component every year. Annual withdrawals from your savings component are not a requirement. The savings component is intended for emergency use only such as family emergencies, medical emergencies, urgent home repairs, legal issues and natural disasters.   Keep in mind that any withdrawal will reduce your retirement income. 

Myth 9: I will always be able to withdraw if I have enough in my savings component. This is not true. You may not be able to withdraw from your savings component if:  

• You have a pension-backed home loan; 
• You owe your employer damages for misconduct or theft; 
• If you have a divorce order pending; or 
• If you owe maintenance - the court can order recovery from your fund. 

Myth 10: I can withdraw from my entire savings component and retirement component when I quit my job. 

With the two-pot retirement system, you will only be able to access your vesting (the balance as of the effective date) and savings (subject to accessibility rules) components when you leave your job before retirement.  Think twice before tapping into your retirement savings.