Solidarity retirement fund warning

[Bianke Neethling]

Solidarity retirement fund warning

A new law allowing South Africans to withdraw part of their retirement savings is raising serious concerns.

 

[Supervan II]

Nooit, bru. The ANC has got you covered.

Just like the NHI.

 

[supersunbird]

These warnings are pure BS, as if 10% (up to a maximum limit of R30 000 aka the seeding capital for the saving component come 1 Sept 2024) will cause that much damage .

It will take a number of years of 33.3% of contributions to savings component to build up to anything significant.

And the other 66.6% cannot be used for anything but retirement, you wont be able to quit your job to access your full pension savings anymore, it will be kept for retirment

I repeat, all these warnings are BS.

 

[Nerfherder]

These warnings are pure BS, as if 10% (up to a maximum limit of R30 000 aka the seeding capital for the saving component come 1 Sept 2024) will cause that much damage .

It will take a number of years of 33.3% of contributions to savings component to build up to anything significant.

And the other 66.6% cannot be used for anything but retirement, you wont be able to quit your job to access your full pension savings anymore, it will be kept for retirment

I repeat, all these warnings are BS.

Agreed.

I keep reading these headlines as an issue with the fund... so bad PR on the side of the fund managers.

The aim of these changes is to incentivise people using the RA as a long term savings account, so could be a really good thing.

 

[supersunbird]

Agreed.

I keep reading these headlines as an issue with the fund... so bad PR on the side of the fund managers.

The aim of these changes is to incentivise people using the RA as a long term savings account, so could be a really good thing.

A much bigger danger is government trying to prescribe SOE enterprises or similar.

 

[Pegging]

A summary Old Mutual sent out a while ago.

 

[Bliksis]

These warnings are pure BS, as if 10% (up to a maximum limit of R30 000 aka the seeding capital for the saving component come 1 Sept 2024) will cause that much damage .

It will take a number of years of 33.3% of contributions to savings component to build up to anything significant.

And the other 66.6% cannot be used for anything but retirement, you wont be able to quit your job to access your full pension savings anymore, it will be kept for retirment

I repeat, all these warnings are BS.

These articles are written for the feeble minded, and should actually be in different colours to highlight difficult words. Lol

 

[UB40]

A summary Old Mutual sent out a while ago.


View attachment 1724185

I like this.
Less chance of dipshits cashing out and wasting their pension funds and then relying on the government for their R2000 a month SASSA grant

 

[3WA]

I'm gonna get the new iPad Pro with my R30k.

 

[Bliksis]

I'm gonna get the new iPad Pro with my R30k.

Some will have it available for crucial things. Home/vehicle repairs, etc.

Some will buy iPads.

 

[SeRpEnT]

These warnings are pure BS, as if 10% (up to a maximum limit of R30 000 aka the seeding capital for the saving component come 1 Sept 2024) will cause that much damage .

It will take a number of years of 33.3% of contributions to savings component to build up to anything significant.

And the other 66.6% cannot be used for anything but retirement, you wont be able to quit your job to access your full pension savings anymore, it will be kept for retirment

I repeat, all these warnings are BS.

So who would you expect to see make use of this newly available funds (and future 1/3) and what would they use this funds for?

 

[3WA]

Some will have it available for crucial things. Home/vehicle repairs, etc.

Some will buy iPads.

Dude, did you see the new calculator app? How is that not crucial?

 

[Bliksis]

Dude, did you see the new calculator app? How is that not crucial?

 

[UB40]

I'm gonna get the new iPad Pro with my R30k.

Don't lose it

 

[maumau]

These warnings are pure BS, as if 10% (up to a maximum limit of R30 000 aka the seeding capital for the saving component come 1 Sept 2024) will cause that much damage .

It will take a number of years of 33.3% of contributions to savings component to build up to anything significant.

And the other 66.6% cannot be used for anything but retirement, you wont be able to quit your job to access your full pension savings anymore, it will be kept for retirment

I repeat, all these warnings are BS.

I'm confused. Are we only allowed to draw a maximum of R30k per year?

 

[supersunbird]

I'm confused. Are we only allowed to draw a maximum of R30k per year?

No, but the initial amount used to seed the savings pot component from your pre-1 Sept 2024 retirement savings will be 10% of fund value (capped at R30 000).

So if your fund has R150 000 in it, you will get R15 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R250 000 in it, you will get R25 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R450 000 in it, you will get R30 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R1 000 000 in it, you will get R30 000 seeded into the savings pot component on 1 Sept 2024.



Then your savings pot will grow at 33.3% of your contributions.

So with R3000pm contributions to retirement fund, R1000pm will go into the savings pot component, thus you'd have R42 000* in the savings pot in total after a year.

With R15 000pm contributions to retirement fund, R5000pm will go into the savings pot component, thus you'd have R90 000* in the savings pot in total after a year.



*this excludes growth or decline in fund value due to market forces, and assumes no withdrawal has taken place.

 

[maumau]

No, but the initial amount used to seed the savings pot component from your pre-1 Sept 2024 retirement savings will be 10% of fund value (capped at R30 000).

So if your fund has R150 000 in it, you will get R15 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R250 000 in it, you will get R25 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R450 000 in it, you will get R30 000 seeded into the savings pot component on 1 Sept 2024.

If your fund has R1 000 000 in it, you will get R30 000 seeded into the savings pot component on 1 Sept 2024.



Then your savings pot will grow at 33.3% of your contributions.

So with R3000pm contributions to retirement fund, R1000pm will go into the savings pot component, thus you'd have R42 000* in the savings pot in total after a year.

With R15 000pm contributions to retirement fund, R5000pm will go into the savings pot component, thus you'd have R90 000* in the savings pot in total after a year.



*this excludes growth or decline in fund value due to market forces, and assumes no withdrawal has taken place.

Thanks so much SuperSun for taking the time to explain so clearly, I appreciate it.

 

[Bliksis]

I'm confused. Are we only allowed to draw a maximum of R30k per year?

I asked that, and it annoyed him quite a bit.

 

[maumau]

I asked that, and it annoyed him quite a bit.

Sometimes he's more patient.

 

[JayM]

What tax rates do you pay when you withdraw the savings pot?