Will I be penalised for a Liberty RA withdrawal?

If you have a Liberty Retirement Annuity (RA), your withdrawal options and any potential penalties are governed by both Liberty's specific terms and South Africa's retirement regulations. Here's what you need to know about accessing your savings.

Current withdrawal rules

From the Savings Component Under the two-pot retirement system, you can now access a portion of your RA savings once per tax year. This applies to all RAs, including those with Liberty. You'll need a minimum of R2,000 to make a withdrawal, and it will be taxed at your marginal rate.

From the Retirement and Vested Components Most of your RA must stay invested until age 55, with limited exceptions:

• If you become permanently disabled
• If you formally emigrate through SARS
• If your total retirement savings across all funds is below R247,500

Understanding Liberty's penalties

Traditional providers like Liberty often charge early termination penalties when you make changes to your RA, especially if it's a paid-up policy. These penalties typically cover their initial costs and broker commissions. Even if your RA is already paid up, it's important to check with Liberty about any remaining charges that might apply.

Planning your next steps

While accessing retirement savings early might seem appealing, remember that your RA provides important tax benefits and is designed to support your retirement. If you're reconsidering your retirement planning, it's worth exploring more modern, cost-effective options.

10X offers RAs with no hidden fees and no early termination penalties. Our straightforward fee structure means you keep more of your investment returns. You can transfer an existing Liberty RA to 10X without affecting the standard withdrawal rules or tax benefits.