Last month, President Cyril Ramaphosa signed a significant legislative change into effect with the passing of the Revenue Laws Amendment Bill of 2023.
This new law introduces whats been dubbed as a two-pot system for retirement funds, set to roll out on 1 September 2024.
But what does this mean for individuals planning for their financial future?
The two-pot system aims to address longstanding concerns over the accessibility and preservation of retirement savings. Under this new framework, contributions made after the implementation date will be divided into two distinct components: a savings pot and a retirement pot.
The savings pot will allow members to access funds during times of financial hardship, providing a safety net without the need to completely cash out their pension. Meanwhile, the retirement pot ensures that funds earmarked for retirement remain preserved until needed in later years.
