supersunbird
Honorary Master
Fixed that prediction for you.
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New two pot retirement system
- Thread starter supersunbird
- Start date
Fixed that prediction for you.
supersunbird
Honorary Master
Well, it is primarily intended as retirement savings, so why not?
Pho3nix
The Legend
Seems it's company dependant on how this works; so you could be placed on the same fund as your 2/3 for your savings pot. Or the company can default everyone's savings pot to whatever the trustees elect.
Better for everyone to ask their advisor if they wanted to use a different fund for the savings pot.
marco79
Expert Member
So you guys are saying I won't have immediate access to the 1/3 of my RA but only to R30k.
supersunbird
Honorary Master
Yes.
The current retirement savings, minus R30 000 (or less if fund value under R300 000), will go into a vested pot.
supersunbird
Honorary Master
Would be stupid IMO, as long term growth would likely suffer.
supersunbird
Honorary Master
Entire savings pot.
And yes, would depend on how much you contribute and for how long and the growth.
Pho3nix
The Legend
Depending on your normal tax rate this could be problematic. People need to remember the tax aspect!
Good emergency fund though
Pho3nix
The Legend
I'll confirm properly with my FA on Monday
You sure about this?
The wording around the vested pot is that current retirement plan conditions will apply.
At current I have the option to continue, move or withdraw upon resignation.
supersunbird
Honorary Master
I did not mention the vested component, I only mentioned the retirement component and thus my comment only relates to the retirement component, which I am sure about.
Pho3nix
The Legend
Is this not applicable to new funds going into forward is my understanding? So if you have R300k in August 2024, R30K goes to the savings pot. R270k goings into the retirement side.
If I do resign, any new funds in the retirement side I can’t touch but the R270k that was there I can?
supersunbird
Honorary Master
In that scenario, you will have 3 pots (vested, savings and retirement), but all new retirement funds will only have 2 pots.
supersunbird
Honorary Master
The not-accessible part is good, some people need to be protected from themselves, like those leaving their jobs to access their full retirement money for romance or whatever scams.
If one is of the "Yuck, controlled retirement savings? I don't want that tax benefit, let me do my own thing" crowd, then it is advisable to minimise ones exposure to these things anyway, from the start.
If one is of the "Yuck, controlled retirement savings? I don't want that tax benefit, let me do my own thing" crowd, then it is advisable to minimise ones exposure to these things anyway, from the start.
OK, make sense then.
Not ideal for those that actually can manage their own wealth or those that worked towards a goal to "retire" early.
supersunbird
Honorary Master
Those who want to "retire early" (before 55 early) outside of formal retirement savings, they should minimize exposure to formal retirement products from the get go, and make sure they are resilient to falling for scams.
Lawnchairman
Expert Member
This video explains everything succinctly.
supersunbird
Honorary Master
Not flawless, he either didn't understand her question or skirted it, about accessing the vested pot if one say switches jobs at 35, you will be able to access the whole vested pot if one desires (not that one should).