Financial services firm Alexforbes said that it has the responsibility to educate people on the intricacies of the two-pot retirement system to help individuals make well-informed decisions regarding their retirement savings.
Having access to reliable information can help people balance their retirement funding goals with their short-term emergency needs.
Avishal Seeth, head of retirement consulting at Alexforbes said that the timing of the two-pot retirement system and access to the savings pot can be emotional.
“It becomes more challenging when incorrect information spreads, creating wrong expectations among members,” Seeth said.
Alexforbes said that they support the implementation of the two-pot retirement system because of the positive impact it will have on the financial future of retirement fund members.
Here is some critical information that people need to know about the two-pot retirement system:
- The implementation date is September 1, 2024.
- From September 1, 2024, any money saved in a retirement fund will be split into a savings component and a retirement component.
- One-third or around 33% of retirements
- The initial amount in the savings component will be 10% of the amount saved in the vested component, up to a maximum of R30,000.
- The minimum withdrawal amount is R2,000.
Seeth said: “Given the complexity of retirement funding, especially with the introduction of the two-pot retirement system, there is a heightened need for simplified and accurate information.”
Having the right information empowers people to make informed decisions, effectively and responsibly.
Seeth said that access to accurate information protects the financial wellbeing of people and enhances confidence in the retirement funding system.
It is vital that people seek accurate information from reliable sources and obtain advice from an accredited adviser to understand the implications of their choices.
This will help them avoid disillusionment and frustration with the retirement savings process.
IOL Business