New two pot retirement system

tin4444 said:
If someone has 2 or 3 RA’s, how are they capping the 10% and to a maximum of R30 000?

Sure it will be picked up most likely when submitting tax returns but that is still after withdrawals.
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Ofcourse

Your provider also submit tax documentation on their behalf
 
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@OP, does the status of the RA affect your ability to withdraw any savings. Talking about dormant / paid up policies.
 
tin4444 said:
If someone has 2 or 3 RA’s, how are they capping the 10% and to a maximum of R30 000?

Sure it will be picked up most likely when submitting tax returns but that is still after withdrawals.
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10% (to a maximum of R30 000) of each RA value.

So if you have 3 RAs of R400 000 each, you will have 3 RAs with a savings pot of R30 000 each, and a vested pot of R370 000 each,

If not accessing, there will be no tax implications.

The limits on number of funds savings pots accessed in a tax year and minutia how taxation will be handled are not known yet.
 
Shi said:
@OP, does the status of the RA affect your ability to withdraw any savings. Talking about dormant / paid up policies.
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Can't see that it will. Those will get 2 pots created, savings pot of 10% of fund (to maximum R30 000) and vested pot with the rest. If withdrawing from the savings pot, just the vested pot will remain.
 
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supersunbird said:
Can't see that it will. Those will get 2 pots created, savings pot of 10% of fund (to maximum R30 000) and vested pot with the rest. If withdrawing from the savings pot, just the vested pot will remain.
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Also, the concept of a paid up RA doesn't really apply to newer generation RAs. You simply stop paying when you feel like it. And restart whenever you wish.
 
supersunbird said:
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.
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A few additional questions if you perhaps may know the answers.

What happens in the case of resignations, and the transfer of the vested pot and savings components?
If transferring to a private RA, do they also see it as vested component transfer and savings component transfer?
Especially with the vested component, because if not seen as a vested component transfer and “new contribution”, 1/3 of the vested component will be accessible through the “new contribution” savings pot but now at marginal rates and not withdrawal rates?

The savings component also has implications on resignation and transfer thereof as if is seen as a new contribution in the private RA, whatever value you do have in the old savings component will be split again when transferring.

Just curious from resigning point of view what happens going forward.
 
tin4444 said:
A few additional questions if you perhaps may know the answers.

What happens in the case of resignations, and the transfer of the vested pot and savings components?
If transferring to a private RA, do they also see it as vested component transfer and savings component transfer?
Especially with the vested component, because if not seen as a vested component transfer and “new contribution”, 1/3 of the vested component will be accessible through the “new contribution” savings pot but now at marginal rates and not withdrawal rates?

The savings component also has implications on resignation and transfer thereof as if is seen as a new contribution in the private RA, whatever value you do have in the old savings component will be split again when transferring.

Just curious from resigning point of view what happens going forward.
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If you resign the vested component from before the 1 September will be withdraw-able; anything after will need to be transferred.
The 1/3 you can withdraw if you haven’t used your once a tax year privilege.

Above is my understanding.
 
So if we never have a need to access any of our retirement as emergency savings is there any change or impact to my retirement?

I would assume it would just give me the option to pull out a lump sum come retirement?
 
Pufferfish94 said:
So if we never have a need to access any of our retirement as emergency savings is there any change or impact to my retirement?

I would assume it would just give me the option to pull out a lump sum come retirement?
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Yes it affects the potential growth of your retirement massively.

Watch this video. It explains it in detail:

FiestaST said:
The ULTIMATE Guide To The New Two Pot Retirement System! - Money Marx

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I don't understand the second part of your question?
 
Pufferfish94 said:
So if we never have a need to access any of our retirement as emergency savings is there any change or impact to my retirement?

I would assume it would just give me the option to pull out a lump sum come retirement?
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Yes, no change in expected outcome if not accessing ever.

One could already pull out a lumpsum of up to 33% (with R550 00 tax free, and then there is a tax table for higher amounts) on retirement. Now the lumpsum in retirement will be limited to the savings component, and 33% of what is in the vested pot (current savings accumulated until the end of this month) at retirement
 
I know this is the two pot thread but it also seems related to the legislation. I have two old paid up RA's that I left ( smallish amounts < R100k each ). Apparently there are changes about investments with these amounts and I need to move them or they go into a money market or yada yada.

Worth withdrawing them and just throwing it into my bond rather? At the current withdrawal tax rate?
 
Kosmik said:
I know this is the two pot thread but it also seems related to the legislation. I have two old paid up RA's that I left ( smallish amounts < R100k each ). Apparently there are changes about investments with these amounts and I need to move them or they go into a money market or yada yada.

Worth withdrawing them and just throwing it into my bond rather? At the current withdrawal tax rate?
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Your current age?
 
Kosmik said:
I know this is the two pot thread but it also seems related to the legislation. I have two old paid up RA's that I left ( smallish amounts < R100k each ). Apparently there are changes about investments with these amounts and I need to move them or they go into a money market or yada yada.

Worth withdrawing them and just throwing it into my bond rather? At the curren
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Kosmik said:
t withdrawal tax rate?
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As the big bird asked, age? Under 55 and over R15 000 no withdrawal. Only Section 14 transfer to another provider
 
JustJack said:
As the big bird asked, age? Under 55 and over R15 000 no withdrawal. Only Section 14 transfer to another provider
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Thats after as far as I know, the funds are paid up, relatively sure I can cash now at the 18% tax rate.

Both amounts are seperate RA's and both under R100k
 
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