Even on the current system it will be taxed. What most people don't know is that thes a tax benefit on monthly payments to Retirement funds so you are currently paying less tax than what you should be potentially paying. I don't disagree entirely, it definitely feels like a "scam" but it's less than what it looks like
A strategy to get more tax from the already highly taxed South Africans. And they know that normal people are struggling and will opt to withdraw. Already people can’t afford retirement. Should be a last last resort
@@nomvanoduma9221 Consider the tax implications carefully. I understood from another video that the tax at a nominal rate means that your yearly tax could increase as the withdrawal could push you into a higher tax bracket when added to your annual salary. It's worth investigating. This is govt's strategy to tax the up to R550 000 that would have been your tax free entitlement upon retirement! People are not going to be left with that much cash out on retirement at all if they withdraw so they would have forfeited on getting R550 000 tax free. Smart govt, woe is us!
Never ever withdraw money from your retirement fund no matter how desperate you are, let's rather learn to save for emergencies. Only 6% retire comfortably in SA and with this system i forsee this number going even lower😢
This system wasn't created for the employees to benefit but for government to benefit when employees cash-out......but sadly most employees are heavily in debt and will end-up depending on this every year like an annual bonus.....
The most simplest explanation ever 👏👏 on the short term it can help with these increasingly tough economic siturations but on the long term misuse of this could lead to working up until 75+ because we wont "afford" to retire 🤔
Thank you for the clarity Sis Nicolette. I was wondering about the tax side of things. I now know to leave that money as is,and never withdraw anything it's not really worth it 😅
'Every withdrawal you make from your savings component is added to your taxable income and will be taxed at a fixed marginal tax rate at the time of withdrawal', this is the elephant in the room. The government wants to make money more because they know people will be withdrawing from their savings.
This tax thing hurts my little heart because the money saved towards retirement is the money already taxed from your monthly salary over the years, I am not sure why it is being taxed as a lump-sum again when you withdraw. Our government is really milking us.
@@FinancialBunny That's not entirely true. Money contributed to an RA uses post tax amounts and you only get a refund when you do your taxes once a year.
@@AbsoluteInference Actually no, you get a tax deduction if you contribute to a pension fund or RAF. When you get a refund from SARS it maybe because you r contributions are not linked to your “salary/ payroll processing meaning that sars will only find out about it after the end of the year of assessment.
But guys I'm also in the financial sector, but it still doesn't make sense that the amount was taxed prior being saved. Why is the government taxing it again
I’m with the employer and the amount that is saved in my pension is not taxed. My salary is only taxed after the deductions of my pension contributions hence the government taxes when we withdraw money from our pension funds. It might be different with you though.
i foresee a lot of people resigning before September, imagine being told you cannot access your money and you can only do so when you reach retirement age😅😅😅, i'm sorry but i for one cannot leave that up to the government(Steinof shandis). thank you for the video.
I'm still asking myself what will happen if i resign and stop working at 40 years, which is not retirement age... will government wait until I'm 55to give me my money
My sister was working for post office 30yrs,then there were retrenchments she was not retrenched she took early retirement because she is 55yrs in February,she's been waiting for her payout since and she's been asking the HR,they said they'll give her UIF which they gave to her as a salary in June.Now they want her to come back to work,they sent her a form to fill to confirm that shes coming back, she asked abt retirement payout,they just talking about UIF which she will get as a salary every month.Question is where is the pension money?Is it still there?
Hi Mcoco thank you very much for the valuable information but can I be nosy and ask you to show us the books in your shelf behind you there. It creates curiosity. I tried not to ask about it but hey, I just couldn’t keep it in anymore. I also wish I could one day be able to present myself to confidently. I first met you in 2017 or 18 and my life changed a lot. I also read “What’s your move” cover to cover. You are jewel sis. 🙏🌹
So its a mechanism for releasing more money into the fiscus to be taxed so govt can pay the grants and pay their shortfall. There is no.proper vision forward.
absolutely bro,im very worried about this system,i wish it could fail so our money stand there till we retire,this is clear robbery,imagine the tax man,and a lot of instructions over there,people need money now,that's why robbery is escalating
Great idea for those of us with a 'do or die' attitude. We may as well enjoy the already plundered remains of the fruits of our labours while the body is able!
This system is just a scam, basically it's more money for the tax man than me as an individual. They could have just went to the credit union and list all your credits one has and use that money to pay off some of the credit's that are pulling you down financially so that one can be In a stable like financial position.
So what happens to your vested pot from next financial year .you will have access to saving pot.will you have access to your vested pot?or only a 3rd of it.
Hi Nicolette. My question is how will the interests be calculated between the two pots, will they be calculated separately or it will be a summed. And will it impact the compounding which would have been accumulated if savings remained in 1 pot?
What then happens to the third pot ( the vested pot) after they have seeded the savings pot with 10% Will I have access to my vested pot upon resignation after September 2024? Is it also only available on retirement? How about upon retrenchment or dismissal? Or at the end of a fixed term contract? It would make sense to only lock the pot made up of the 2/3 contributions but not the vested pot. There’s really no benefit to this for the consumer. The government will be the biggest winner. They have finally found a creative way to dip their corrupt hands into our savings
The information I got from Alexander Fobes is that, If I resign after 1st of September, I can still withdraw all my previous contributions to my fund, but the ones I will contributed starting from September can never be touched.
Employees need to understand the capped amount and the tax implications. For me it is really not necessary to take the R30k now unless you have an emergency and don't have an alternative.
@@mokolaericaphamuli355 you can only contribute to the savings pot via a retirement fund and only 1/3 of it goes into the savings pot and the 2/3 into the retirement pot
I've studied this system very closely & firstly there is 3 Pots ( Vested Pot ) not just 2 .People ...I'm speaking to the hard working , honest tax paying citizens that have actually contributed to the economy of this country irrespective of the financial crisis this country is in right now .People don't withdraw any money from your savings don't be tempted .Just leave it for now .Reason being is this whole two Pot system is not actually to benefit you .The masterminds let alone the people that run this country are milleniums away from constructing smart systems to bebefit you let alone this country .Invest your money offshore/property/gold if you can from now & be very wise about your savings .Do not touch your retirement funds .Give it one to two years to confirm what I'm saying .No more than that .
@FinancialBunny So should one resign before 1 September you can withdraw all your pension contributions? After 1 September you can’t access your pension until retirement age? Kindly please clarify. Please and thank you ❤
According to information from my side, you can only withdraw all your previous contributions in case you resign or get retreached after 1st of September but any other contributions from the 1st going, you can not touch it. Information from Alexander Fobes.
Can you leverage a loan against your RA for a loan for an income bearing project like buying lanf and building a residence for rental. Its seems unfair that a finance corporation can use our funds to buy property but as an individual you cant and be taxed again if you withdraw full amount
Yes you can get a loan or surety for a loan if you use the funds to buy, build or renovate your home. This is heavily regulated by your fund's rules and the board of trustees have to decide if they will allow you to do so. There might also be tax implications. Many funds do not allow this.
I wonder which debts burden can be erased by 21k after tax ...since they say its gona be a relief to SA workers ..mxm...they had to squeeze the economy through stealing to be in such shambles...they knw well pp will be desparate ...disgusting nje.
True let people save money Money doesn't save itself. Every money that you get save at least 50% of that money If you are 5years to your retirement never use your bonus anymore Save it all you won't regret it They say money has one promise if you save me 2day I will save you 2morrow M
And with this corrupt government, who steal money every day, they can end up saying no money for pensioners, so I am going to bubuhla my money, come September 😂😂😂
Hi Nicolette,my question is not related to this topic but need your advise if I have a fixed deposit of about 3 years it is almost a year old and I feel over indebted can't I borrow from my invest and return the money borrowed before maturity or rather cancel the fixed deposit ?
Not Nicollette but speak to your financial adviser or the institution where you have a fixed deposit. On most fixed deposits there are penalties if you withdraw earlier. They normally will not allow you to borrow an amount from the deposit. And in most cases even if they do it might be more than the penalty.
I am entangled in a situation, in summary; i left my job in 2021 took all my pension money deposited into my RA. Now, still unemployed i cant contribute towards my RA. Will this affect me when i want to withdraw?
From a layman's perspective I wouldn't think you will be affected in anyway. Remember the RA money is still your money which suppose to grow in interest whether you are contributing more to it or not. The change that the current pension law amendments seek to do is to enable you to withdraw some of your saved money, which you could not ordinarily do before. I hope that I am right.
@frederickhefer3442 for this financial year.they didn't say anything about maximum limits further ,so maybe if your contribute alot your will be able to take out more if needed.
Very dangerous DEBT TRAP - In future pensioner s will be poorer - This is no different than - ISIDUDLA - Name given to teacher who take early pension - blow the money and come back for re-employment.
So the funds that are sitting in the saving component, does it accumulate interest? Or its just removed from your total contribution and it's just sitting there? 😞 Is the two pot automatic or you have to opt for it?
No it’s still part of your retirement fund. It’s just accessible once a year when you need cash. Please ask your fund administrator about opting in. Remember it will be the new law from 1 September for retirement funds so there isn’t opting in
I’m not sure if I understood, what happens if you don’t withdraw from savings pot in a year since you’re allowed to withdraw once a year or you don’t withdraw until the retirement ?
you are allowed to withdraw from savings only once a year. if you don't withdraw you will take that money into retirement. There is no force to withdraw
I thought this system will not be in effect from 1st September … I heard on the news that they may push the date as they will not be ready by 1st September . Anyway I will definitely make a withdrawal of Atleast 10 000 just to settles my debts .
The reform takes place 1st September 2024. If you are no longer contributing to a fund then it won’t apply to you. But essentially if you wanted to withdraw then monies from your existing RA can be used to seed the savings component. Only 10% or up to R30K
@@FinancialBunnyDoes the extension to 1 September mean that anyone retiring before then will still fall under the old rules? Ie. They can get all their money subject to tax? How about GEPF? Please talk about this as this is most on people's minds.
You will get one third and the other 2 thirds only on retirement. I stand under correction but if the amount is under R250k you will be able to withdraw it all.
You know whr the danger is?😅 This is veeery tricky 😢 yoh more financial or debt traps. 30k nowadays is like 20cent so NOPE! unless u really have emergency.
Why did they introduce this ridiculousness in the first place? They should have let us drown in debt. We were fine. This brought so much excitement and confusion in the beginning.
Honestly, not all of us will reach retirement. Second is only a potion. Retirement companies or retirement holding companies invested this money. Now, they have to recall their investment positions so that they can pay members. So these companies don't want to do it because there is a lot of admin n cost involved on their side. Hence, they are scaring us not to withdraw.
No, RA only allows you to withdraw at your retirement age of which is 55yrs, but Pension fund will allow you to do those withdrawal's for two pot system, consider the tax as this lady says.
Please explain further. My understanding is that 10% and up to R30K of your existing funds will be seeded into your savings component and that’s what you can withdraw
@@penuellmatlala321 I don’t think that is accurate. If your current fund has R300K, only 10% or up to R30K of it will be used to fund the savings component. That’s the amount you can withdraw and you must have a min of R2000. That’s my understanding
@@FinancialBunny Hi , I think the 'Vested ' portion needs more exploration here. Is it correct to say that the vested pot, is the ENTIRE funds existing on September 01, which then 'seeds' the Savings pot ? Hence , 10% up to a max of R30 000 of the 'vested' pot goes into savings. My understanding is that apart from this, nothing in the vested pot is subject to one thirds. Please explain what happens to the vested pot on resignation? Is it fully accessible subject to tax? What happens upon retirement? The same?
Taxation is there to provide money for grants/dole for those who didnt or who cant provide for pension funds .Dammed if you do ,dammed if dont? Wish i invested my money where i get income from. Will still be paying tax anyway There is no win for people who plan financially for the future. No govt dangles a big enough carrot
