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Two-Pot System Nouvelles

Belgique Dernières Nouvelles,Belgique Actualités

An aspect of the two-pot system that requires careful attention is tax implications.

By Nzwananai Shoniwa, Managing Executive at Sanlam Corporate and Koketso Mahlalela, Head of Member-led outcomes

These findings highlight a critical need for financial education and support. While the two-pot system provides flexibility, withdrawals must be made judiciously.September 1, 2024. Members will continue to have the same rights to access their retirement benefits on resignation, retrenchment or dismissal after 1 September as they currently do.

Under the new system, withdrawals from the savings component are added to an individual’s taxable income for the year and taxed at their marginal rate. Therefore, a withdrawal could push someone into a higher tax bracket, resulting in a larger-than-expected tax bill.tax bracket) withdraws R100 000 from their savings component, their annual taxable income would increase to R470 000. This could push a portion of their income into the next tax bracket .

for women. This required 5.6 and 6.3 years of additional contributions, respectively, to recover to the pre-withdrawal level.

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Belgique Dernières Nouvelles, Belgique Actualités

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