The two-pot retirement legislation provides for a once-off “seeding” of the savings pot from retirement savings you have already saved in your retirement fund on 31 August 2024. This will ensure that those who want to access some money soon after 1 September 2024 will be able to do so. This only ever happens once and is the starting balance in your savings pot in the fund.
The legislation proposes allowing access to 10% of the value of your savings on 31 August 2024 up to a maximum of R30 000.
If the amount transferred to your savings pot on 1 September 2024 is at least R2 000, you will then be able to withdraw from 1 September 2024 or any time thereafter.
If you have more than one retirement fund, each one will be seeded (unless the fund is excluded) and you will be able to withdraw from each fund.
SEEDING EXAMPLE 1:
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If you have R500 000 in your retirement fund on 31 August 2024.
10 percent of this amounts to R50 000.
However, a maximum of R30 000 only can be transferred into your savings pot on 1 September 2024.
You will be able to withdraw any amount between R2 000 and R30 000 after 1 September 2024.
SEEDING EXAMPLE 2:
If you have R10 000 in your retirement fund on 31 August 2024.
10 percent of this amounts to R1 000.
As this is less than the maximum of R30 000, this amount will be transferred to your savings pot.
However, R1 000 is less than the R2 000 minimum you are allowed to withdraw, so you will not be able to withdraw immediately.
You will have to wait until you have contributed another R3 000 to your fund.
One third of anything you contribute after 1 September 2024 will be allocated to the savings pot, so R1 000 of the first R3 000 you contribute after this date will be allocated to your savings pot.
This will increase the balance in your savings pot will be R2 000 and then you will be able to take a savings withdrawal benefit from your savings pot.
