Can I access the balance of my preservation fund before age 55?

Yes, but access rules depend on when you started your preservation fund, thanks to the two-pot system introduced in September 2024. Here's how it works.

If You Had a Preservation Fund Before September 2024

Your balance was split into two components when the two-pot system began:

The "vested" component holds most of your pre-September 2024 savings (at least 90%). When the split happened, up to 10% of your balance was moved to a savings component, initially capped at R30,000. Both these portions continue to grow with market movements, so their current values may be significantly different from the initial split.

If you hadn't used your one-time withdrawal option under the old rules before September 2024, you still have this available from your vested component.

If You Started Your Fund After September 2024

Your preservation fund automatically splits your money into two components:

• A retirement component (two-thirds of contributions) that stays invested until retirement
• A savings component (one-third of contributions) that you can access annually if needed

Both components grow with market returns, so their values will change over time. You'll need to maintain at least R2,000 in the savings component to make a withdrawal.

Understanding Access and Growth

The power of your preservation fund lies in long-term market growth. For example, R30,000 invested for 20 years could grow substantially with compound returns. This is why accessing your savings early needs careful consideration:

• Withdrawals are taxed at your personal income tax rate
• You lose out on compound growth - even small withdrawals today can mean significantly less money in retirement
• Market growth affects both components, so waiting often means accessing a larger sum later

Making an Informed Decision

Before accessing your preservation fund, speak with our investment consultants. They can help you understand the current value of your components, project future growth, and explore alternatives that might better suit your needs.