Two-pot pensions: Treasury clears up tax poser | Business

The new two-pot system means South Africans will be able to cash out one-third of their future retirement savings throughout their career, while two-thirds will only become accessible on retirement. The one-third component is called the"savings pot", while the other two-thirds is the"retirement pot".

On Wednesday, Treasury confirmed that withdrawals from the savings pot upon retirement will also still be subject to lump sum rates – and won't be taxed at the much higher normal income rates that will apply to early withdrawals. But if you wait until retirement before taking a lump sum - on an amount of R2 million, you will pay an effective tax rate of only 22.4% - regardless of any other taxable income earned in the same year.

The savings in your retirement pot that are not paid out as a lump sum on retirement, will be received as a monthly annuity and taxed as individual income.

España Últimas Noticias, España Titulares

Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.

No more 'first come, first served' as Eskom issues new rules for grid access | BusinessEskom has issued interim rules to help it deal with grid access constraints, particularly only making allocations to projects that can demonstrate they are shovel-ready.
Fuente: News24 - 🏆 4. / 80 Leer más »

Gaps loom in key roles as banks, insurers neglect succession planning, warns Prudential Authority | BusinessSome South African financial institutions are not prioritising succession planning for critical roles, leaving banks and insurance companies overly dependent on current personnel, according to an industry regulator. | News24_Business
Fuente: News24 - 🏆 4. / 80 Leer más »