Preservation fund
What happens to my retirement fund after I resign?
When you resign from your job, your options depend on whether you have a provident/pension fund or a Retirement Annuity (RA).
Here's what you need to know:
For Provident Funds and Pension Funds:
Your Preservation Options:
You can transfer to a Preservation Fund to maintain tax benefits and continued growth.
Your Withdrawal Options:
Under the two-pot system (effective 1 September 2024):
- Vested Component: Full withdrawal available, subject to tax.
- Savings Component: Full withdrawal available, subject to tax and annual withdrawal limits.
- Retirement Component: Must be preserved until retirement.
Pre-September 2024 funds or if not subject to two-pot system:
- Full or partial withdrawal is allowed, subject to tax.
For Retirement Annuities (RAs):
Your Preservation Options:
- Keep your existing RA: Your RA is already in your name, so you can continue with it as is.
- Transfer to another provider: You can move your funds to a different RA provider such as 10X Investments if you'd like. Read more about the 10X Retirement Annuity here.
Your Withdrawal Options:
Under the two-pot system (effective 1 September 2024):
- Savings Component: You can withdraw from this pot once per tax year, even if you haven't resigned. Minimum withdrawal is R2,000, with no maximum limit.
- Retirement Component: This remains preserved until retirement age (typically 55).
Vested Component (pre-September 2024 funds): These remain inaccessible until retirement age, typically 55.
Important Considerations:
- Withdrawing reduces your retirement savings significantly.
- Consider your long-term financial security before making withdrawal decisions.
- Preservation maintains your saving momentum and tax benefits.
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