Quarter 4 • 2023
The proposed two-pot retirement system allows you to dip into part of your retirement savings while you are still working. This is however only if you have an emergency. Here we recap some of the important points of this new system. It is uncertain when exactly the two-pot system may come into effect, but remember that you cannot access your money before the effective date.
We also tell you more about Additional Voluntary Contributions (AVCs). This is a way of increasing your retirement savings by putting a little extra money aside monthly or as a once-off.
In this newsletter we explain the Balanced Growth Portfolio and why it is important to set your sights on the long term when looking at the investment performance of your retirement savings.
THE TWO-POT RETIREMENT SYSTEM
LET'S RECAP THE IMPORTANT THINGS
- SAVINGS POT – Up to one-third of all your contributions will be allocated to this pot.
- RETIREMENT POT – At least two-thirds of all your contributions will be allocated to this pot.
- You might resign with the risk that you may not soon find new employment. This places you in a worse financial predicament.
- Often the temptation is too great and you withdraw more than you require. This leaves you with less retirement savings when you retire.
- Is the two-pot system effective yet? No.
- Do we have all the details yet? No.
- Will members be informed once it is effective? Yes.
- Should I panic or stress about these changes? Should I resign before this comes into effect? Absolutely not.
- Should I consider accessing my retirement savings just because I can? Absolutely not.