The South African government has made big changes to its retirement and pension rules. These changes will start on October 10 2025 and will affect how people get their retirement money. The new system is called the “Two-pot retirement system” and it splits retirement savings into two parts. Workers can access one part before they retire if they meet certain rules but must keep the other part until retirement age. This new system means many workers might get much less money or no money at all when they leave their jobs compared to what they expected before. The change is one of the biggest updates to South Africa’s retirement rules and will impact how end-of-service payments work for most employees.
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Some workers will get less money from their benefits because of new rules:
– People who start work after October 2025 will need to wait longer to get their full payment.
– Workers who take money out too early will lose their bonus payment.
– Part-time and temporary workers who don’t pay in regularly won’t get the same benefits as others.
– People who switch from one pension plan to another might get different amounts.
– Workers with less than ten years at their job might not get full benefits.
Anyone who started a government job after 1996 will follow special rules from their department about these payments. The text is now easier to read with basic words and shorter sentences. It keeps the main points but removes complex terms & extra details.
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You can still choose to get monthly pension payments instead of taking all your money at once when you retire. If you take money out too early you might need to pay extra taxes or get less money later. Getting all your money at once might give you less overall but some people need regular monthly income to feel secure. This change could be hard for people who planned to get a big payment to clear debts or make big purchases. For example a worker who could have gotten R 500000 plus monthly payments before might now only get monthly payments under the new rules. Even though the monthly amounts are bigger they might add up to less money over time.
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– Check your fund statements regularly to know how your work pension is organized.
– Talk to a licensed money advisor to get help with planning.
– Try not to take money out early unless you really need it.
– Let your savings grow until you stop working. Know where to get help if needed.
You can contact places like Treasury, GEPF FSCA and SARS for questions about retirement and taxes. These offices are there to help you understand your rights and benefits. Keep track of your account and stay informed about any changes. This will help you have enough money when you retire.
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