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Retirement Savings - Pot - After September 2024

By: Ilse de Klerk


Oops

Retirement Savings

After receiving information from different sources, this is my understanding of the new rules.

Retirement savings are products for funds that you save for when you retire.
These are your Retirement Annuities, Provident and Pension Funds, Preservation Funds,
Defined Contribution and Defined Benefits

Current rules relating to these funds.

New rules relating to retirement savings

Savings Pot - Pot 1

Retirement Pot - Pot 2

Vested Pot - Pot 3

This is your current, pre-September 2024, retirement savings. Your current savings will 'seed' Pot 1. The funds left in this Vested Pot will keep the 'old' retirement rules until you reach age 55

Seeding - Your vested pot will transfer 10% up to a maximum of R30 000 into the savings pot.

Some exceptions - Each product provider will have their own rules but retirement savings from years long year ago, combined savings, and life and or disability cover. These contracts should be considered carefully. Provident Fund - if you are already age 55 or older, and have not yet 'retired' from your contract, the option is there to exclude them from the new rules.

De Minimus Rule - If the total funds from all the pots are less than R165 000. Then you may take it all as a lump sum.

Fees

Nothing is free.

The product providers may charge a monthly fee for all the new admin and management applicable to keep the 3 pots up to date.
There will also be an admin charge for the as and when changes, for example: the savings pot withdrawal administration.