Personal Finance | Beware of fees and tax implications of two-pot retirement system withdrawals
James Coutinho, senior tax manager at Liberty, explains that tax will be levied on any savings withdrawal benefit taken from the savings pot. Any withdrawal from the savings pot component of your retirement will be considered as part of a member’s remuneration.
Most administrators will also be charging an administrative fee for the withdrawals. There is a significant cost implication in the implementation of the two-pot retirement system as well as increased administration to manage the withdrawals. First, a member will need to complete a withdrawal form, including an estimation of their annual salary or taxable income. Then a directive has to be received from Sars before the funds can be paid out.
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