Two-pot retirement system comes into effect

JOHANNESBURG - The much-anticipated two-pot retirement system has come into effect.

The retirement savings of South Africans are now split into vested, savings and retirement pots.

The vested pot comprises all retirement savings up until 31 August.

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One-third of contributions will go into the savings component.

Consumers can withdraw from the savings pot once a tax year.

The minimum that can be withdrawn is R2,000, which will be taxed, along with a processing fee.

Two-thirds of fund contributions will go into the retirement component which can only be accessed at retirement.