Introducing a revolutionary change to retirement savings, the two-pot system will divide your contributions into three “pots” – savings, retirement, and vested. From 1 September 2024, one-third of your contributions will go into a savings pot, accessible once per tax year, while two-thirds will be allocated to a retirement pot, only accessible upon retirement. Additionally, a vested pot will hold savings made before the new system, giving flexibility in certain situations.
With the new rules, withdrawals can be made from the savings pot annually, subject to a minimum balance. The retirement pot remains untouched until retirement, while the existing regulations apply to the vested pot. The transition aims to enhance saving options and provide more control over funds.
Mark your calendars for 1 September 2024 when the two-pot system goes live, as introduced by the Revenue Laws Amendment Act. Stay informed about the latest financial updates by visiting the News24 Business page.
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