Anticipated impact of the Two Pot Retirement System on the markets.

Loading player...
GUEST: Izak Odendaal - Old Mutual Wealth Investment Strategist

It cannot be stressed enough that early withdrawals from retirement funds should be avoided unless absolutely necessary. The biggest friend any investor has is time, since time facilitates compound growth. Early withdrawals from a retirement fund robs that money of the time to grow. Even at a relatively modest growth rate of 4% per year, R30,000 will more than double to R65,733 over 20 years. At a 6% annual growth rate, it will more than triple to R96,214, and at 10%, will grow to R201,825.

Therefore, taking R30,000 out of your retirement savings today does not mean that your future self will be R30,000 poorer. It means in future you will be poorer by R65,000 or R96,000 or R200,000 two decades from now. It gets worse, since early withdrawals will be taxed at your marginal rate, whereas growth inside a retirement fund is tax-free.

Nonetheless, estimates from the government and various financial institutions suggest that somewhere between R50 billion and R100 billion will be withdrawn in the first month or two after the two-pot system takes effect. This will largely be a one-off event, as future withdrawals will be based on one third of new contributions from September onwards and will therefore be spread out over time.
2 Sep 2024 2PM English South Africa Business News · Investing

Other recent episodes

Family Business to National Player: Anton Gillis on SA’s Hospitality Future

Platinum Hospitality Holdings is set to announce Anton Gillis as its new CEO — marking a major succession moment for one of SA’s leading family‑built hotel groups. Anton shares what the group is seeing on the ground across its national portfolio, where hospitality demand is growing, how operators are navigating…
27 Jul 1PM 15 min

SA Consumers Under Pressure: Retail Signals & MPC Reality

South Africa’s consumer is flashing warning signs — and two retail updates have sharpened the picture. Cashbuild’s weak building materials demand and Mr Price’s shift toward value purchases reveal households under severe pressure. Market analyst The Finance Ghost unpacks how sticky inflation, high interest rates and the MPC’s cautious stance…
27 Jul 12PM 12 min

Why Women’s Financial Empowerment Is an Economic Multiplier

Women’s financial empowerment has the potential to drive economic growth, strengthen households and create lasting generational wealth. Kaya Biz speaks to Alexandra Nortier, Joint Head of Wealth Management at Investec Wealth & Investment International, about why Investec is backing the JSE SheInvests 2026 initiative, the barriers keeping women out of…
23 Jul 1PM 7 min

Affordable Diabetes Care Arrives in SA with Novo Nordisk

Novo Nordisk South Africa GM Sara Norcross explains the launch of the country’s only authorised copy of semaglutide, manufactured using the identical API, process and device as the originator — but at a more affordable price. We unpack what an authorised copy is, why SAHPRA registration matters, how the Acino…
23 Jul 1PM 14 min

SARB holds rates steady in July MPC – What It Means for You

Momentum economist Tshiamo Masike unpacks the SARB’s decision to pause, the upside inflation surprise, and the global factors driving the MPC’s decision. We explore how rising oil prices, geopolitical tensions, and weakening consumer confidence shaped the call — and what households, businesses and markets should expect next. A sharp, data‑driven…
23 Jul 1PM 14 min