New two pot retirement system

[supersunbird]

So there seems to be a lot of misunderstanding of the new two pot retirement system that will be implemented soon, likely active from 1 Sept 2024 unless there are delays.

Post your questions here and lets see if we can get them answered.

 

[Magnum]

Do I gain or lose?

 

[STORMERSFAN]

So there seems to be a lot of misunderstanding of the new two pot retirement system that will be implemented soon, likely active from 1 Sept 2024 unless there are delays.

Post your questions here and lets see if we can get them answered.

Is it only applicable from the contributions you make from SEP onwards?What about your existing balance?

 

[supersunbird]

Do I gain or lose?

Depends, one loses the ability to resign and access all of it (for contributions made after implementation date), but then again, that could be a gain for some people who do not have enough self discipline or fall for romance and other scams.

 

[supersunbird]

Is it only applicable from the contributions you make from SEP onwards?What about your existing balance?

Yes, only for contributions after that date. The existing balance (and it's future growth) goes into what is called the vested component, that will get treated under it's pre-implementation date rules for accessibility and such.

10% of the existing balance, up to a maximum of R30 000, will be used to create and provide seed capital to a savings component.

Example A:

You have R500 000 RA. On 1st of Sept a vested component will be created with R470 000 in it, and a savings component with R30 000 in it, and a retirement component with R0 in it.

Example B:

You have R2000 RA. On 1st of Sept a vested component will be created with R1800 in it, and a savings component with R200 in it, and a retirement component with R0 in it.

 

[Pho3nix]

Yes, only for contributions after that date. The existing balance (and it's future growth) goes into what is called the vested component, that will get treated under it's pre-implementation date rules for accessibility and such.

10% of the existing balance, up to a maximum of R30 000, will be used to create and provide seed capital to a savings component.

Example A:

You have R500 000 RA. On 1st of Sept a vested component will be created with R470 000 in it, and a savings component with R30 000 in it, and a retirement component with R0 in it.

Example B:

You have R2000 RA. On 1st of Sept a vested component will be created with R1800 in it, and a savings component with R200 in it, and a retirement component with R0 in it.

So in Example A I can still withdraw the R470k when I resign?
Assuming Divorce decree's can still chomp into all the money, regardless of which Pot it is in.

But this is how I understood the whole thing. Thank you.

 

[supersunbird]

So in Example A I can still withdraw the R470k when I resign?
Assuming Divorce decree's can still chomp into all the money, regardless of which Pot it is in.

But this is how I understood the whole thing. Thank you.

That is my understanding, vested will have old pre-implementation rules apply.

And yes, divorces are one of the few things that can access retirement moneys.

 

[STORMERSFAN]

That is my understanding, vested will have old pre-implementation rules apply.

And yes, divorces are one of the few things that can access retirement moneys.

Talking divorce seeing as it came up..if you got divorced and let's say court ordered 200k to be paid from pension..does this influence the tax free 500k when u retire?(Tax was paid to sars before final payout)

 

[Quicks]

Do you pay Tax on the R30 000 you withdraw and how much would that be?

 

[longboy]

Damn this is very bad. Just 2 pots when you retire?

 

[supersunbird]

Do you pay Tax on the R30 000 you withdraw and how much would that be?

If you withdraw anything from the savings pot (allowed once a tax year, aka 1 Mar to 28/29 Feb), it is taxed at your current income tax rate for that year.

 

[supersunbird]

Damn this is very bad. Just 2 pots when you retire?

Jip, so you cannot boil too many things at once.

 

[Sideshow Bob]

Jip, so you cannot boil too many things at once.

damn, I make 2 pastas in 2 pots and third is a pot for soup. What do I do now ?

 

[Sideshow Bob]

If you withdraw anything from the savings pot (allowed once a tax year, aka 1 Mar to 28/29 Feb), it is taxed at your current income tax rate for that year.

Fk that. What is the flipping point of this ? Need to read up on this now. Some dev guys at work are working on changes and will ask them as well.

 

[longboy]

damn, I make 2 pastas in 2 pots and third is a pot for soup. What do I do now ?

Your extra pot will be redistributed to the previously disadvantaged.

 

[Quicks]

Fk that. What is the flipping point of this ? Need to read up on this now. Some dev guys at work are working on changes and will ask them as well.

Nice little tax injection the government will see come September. Probably the plan all along.

 

[STORMERSFAN]

Talking divorce seeing as it came up..if you got divorced and let's say court ordered 200k to be paid from pension..does this influence the tax free 500k when u retire?(Tax was paid to sars before final payout)

Anyone?

 

[supersunbird]

Nice little tax injection the government will see come September. Probably the plan all along.

Well, only R30 000 per person, and only those who for some reason want to access that R30 000 in Sept.

 

[Quicks]

Well, only R30 000 per person, and only those who for some reason want to access that R30 000 in Sept.

Treasury anticipates tax windfall from two-pot retirement system – Moonstone Information Refinery

www.moonstone.co.za

"The Budget Review says about R5bn is likely to be raised in 2024/25 due to tax collected as fund members access the once-off withdrawals from their savings"

 

[Sideshow Bob]

Well, only R30 000 per person, and only those who for some reason want to access that R30 000 in Sept.

I am not sure what anyone is supposed to do with R30K tbh. To sort out monthly expense ?