Two-Pot Retirement System: Alexander Forbes Processes Withdrawal Requests Totalling Over R1 Billion

• Alexander Forbes have already had to process 78,000 withdrawal requests since the beginning of September 2024
• The Two-Pot Retirement Systment took effect at the beginning of September, and citizens are already withdrawing from it
• An Alexander Forbes executive has advised people to wait for retirement to avoid paying more tax on their money

Briefly News journalist Byron Pillay has spent a decade reporting on the South African political landscape, crime and social issues.

JOHANNESBURG – Alexander Forbes have been inundated with withdrawal requests since the two-pot system officially launched.

The system, which took effect on 1 September 2024, allows citizens the chance to withdraw from their retirement savings.

One-third of the savings can be withdrawn and accessed at any time, while the remaining two-thirds are reserved for retirement.

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Alexander Forbes receives 78,000 requests

Since the launch of the system, financial services company Alexander Forbes has revealed that they saw an outflow of more than R1 billion.

The company has already processed 78,000 withdrawal requests since the beginning of the month.

Of the billions of rands processed, SARS will also be taking their cut.

Alexander Forbes executive offers advice to consumers

With SARS first claiming any monies due to them from each withdrawal, an executive at the financial services company provided advice to consumers on when to withdraw their money.

Executive for Solutions and Enablement, John Anderson, said those who waited for retirement would reap the most rewards.

"If you leave it there until retirement, then the tax treatment will be more favourable. In fact, the balance that you get at retirement can be subject to at least R550,000 tax-free," he said.

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"So it’s actually better leaving it there for longer from a tax perspective," he explained," Anderson added.

Finance Minister issues stern warning

Finance Minister Enoch Godongwana has issued a warning to citizens to use their retirement savings wisely.

The minister urged citizens not to waste their money when the two-pot retirement system came into effect.

Many ignored his warning and said they would spend their money however they wished, Briefly News previously reported.

Source: Briefly News