The two-pot retirement system aims to provide a solution for South Africans who struggle financially due to a lack of “rainy day” funds.
By dividing retirement fund contributions into two pots — a savings pot and a retirement pot — this system is intended to help people preserve and grow their retirement savings, while at the same time giving them access to a portion of those savings for emergency purposes.
According to the Treasury's estimates, fewer than 6% of South Africans can afford to retire comfortably — and one of the main reasons for this is people cash out their pensions when changing jobs. The new system will remove the ability to do so.
— What's the rationale behind the two-pot retirement system?
While the two-pot retirement system gives you the opportunity to access some of the money in your savings pot for emergencies, doing so will ultimately have an impact on your retirement savings.
It's a good idea to speak to your financial adviser to fully understand this impact before making a withdrawal.
Click here to find an Old Mutual financial adviser.
— THINK TWICE BEFORE TAPPING INTO YOUR SAVINGS
