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Retirement

The two-pot retirement system

From 1 September 2024, new contributions split into a savings component and a retirement component. Older rights can sit in a vested component. A withdrawal from the savings component is taxed.

Reviewed 29 October 2026 by the WiT Money editorial team. This is general information, not a recommendation from a named adviser.

Key points

  • You cannot withdraw the retirement component just because you want cash.
  • A savings-component withdrawal is not tax-free. The fund applies to SARS for a directive.
  • This guide does not print a minimum withdrawal. Ask the fund for the current rule.

The reform that started on 1 September 2024 is usually called two-pot. One pot is a poor name, because many members also have a vested component: rights that built up before the change, including older provident-fund rights. Those rights keep the rules that applied to them. They are not swept into the savings component.

New contributions are split. The savings component is the part a member may ask to withdraw, within the rules, before retirement. The retirement component stays for retirement and generally has to provide an income. Taking the savings component reduces what is left. It is not a thirteenth cheque.

Tax

A savings-component withdrawal is taxed. It is not the tax-free piece of a retirement lump sum, and it is not the same table as a retirement lump sum. The fund requests a tax directive from SARS. This page does not print the rate or a minimum amount, because both sit with the current SARS and fund rules rather than in the calculator file. Do not plan a withdrawal on a blog figure.

Retirement lump sums are a different event

When you retire, a lump sum can be taxed on the retirement lump-sum table in the tax file. For the 2027 year of assessment that table starts with R550 000 at 0%, then 18%, 27% and 36% on the slices above it. Earlier retirement lump sums are aggregated. That table is not a reason to withdraw from the savings component today.

Death and dependants

Retirement-fund death benefits are dealt with under the fund's rules and section 37C of the Pension Funds Act. A nomination form is important and is not always the final word, because the trustees consider dependants. This is not a will, and a will does not automatically override the fund.

Questions readers ask

Can I withdraw because I am unemployed?

Only to the extent the savings component, or a vested right, allows. Unemployment does not open the retirement component. Ask the fund before you resign in order to 'get the money'.

Related

Sources

Page updated 29 October 2026. A source date is the day WiT Money checked that page, not a promise the institution has not changed it since.