Two-pot after year one: how fast your savings pot refills
The savings pot refills with one third of every contribution - R2 000 a month on a R6 000 contribution - so it is back to R24 000 a year after an emptying withdrawal, which pays out R16 560 at a 31% tax rate.
In 30 seconds
- The once-off seed of up to R30 000 never comes back - after it is gone, the savings pot only refills from one third of new contributions.
- On a R6 000 monthly contribution the pot refills at R2 000 a month, or R24 000 a year - which pays out R16 560 after tax at a 31% rate.
- Emptying it every year for 20 years takes out R480 000 that could have grown to about R1.34 million at 9% a year.
Year one was the seed. After that, it is a drip.
When the two-pot system started on 1 September 2024, most members got a once-off seed in their savings pot: 10% of the fund value at 31 August 2024, capped at R30 000, whichever was lower (SARS). That is the money most people withdrew in the first rush.
The seed is not repeated. From then on, the savings pot grows only from one third of your retirement fund contributions; the other two thirds go to the retirement pot, which you cannot touch before retirement (SARS). So the question after year one is simple: how fast does it fill up again?
How fast it refills: a worked example
Take someone earning R40 000 a month, with employer and employee contributions together of 15% of salary - R6 000 a month into the fund.
- R2 000 a month goes into the savings pot (one third of R6 000).
- R24 000 a year builds up there, before growth and fees.
- R4 000 a month goes into the retirement pot and stays there.
If the savings pot was emptied last tax year, it holds about R24 000 again twelve months later. That is the most this member can take out each year, unless they leave it to build for longer.
The 15% contribution rate is an illustration, not a legal figure. Your own split depends on your fund's rules and on what you and your employer pay - your benefit statement shows the savings-pot balance.
What a refilled pot pays out
A savings withdrawal is taxed like a bonus: it is added to your income for the year and taxed at your marginal rate, with no tax-free portion (SARS). On a R480 000 salary, the next rand earned in 2026/27 is taxed at 31% (SARS tax tables; see our bonus post for the working).
- R24 000 withdrawn
- R7 440 in income tax (31%)
- R16 560 paid into your account
The fund first gets a tax directive from SARS, and any tax you already owe SARS is taken off before you are paid (SARS media release). If you are behind with SARS, the payout can be much smaller than you expect.
Some funds charge an administration fee per savings withdrawal. We could not find a single published figure that applies to all funds - check your fund's fee schedule before you apply.
The rules that set the rhythm
- One withdrawal per tax year, and the tax year runs from 1 March to the end of February (SARS).
- Each withdrawal must be at least R2 000, up to the whole savings-pot balance (SARS).
- Whatever is left at retirement can be taken in cash with your retirement lump sum, instead of being withdrawn early at your marginal rate (SARS).
Because the limit is per tax year, not per twelve months, a withdrawal in February and another in March is allowed. But in the example above, a pot emptied in February holds only R2 000 by March - exactly the minimum. Back-to-back withdrawals mostly move the tax from one year into the next; they do not create more money.
The cost of making it a habit
The real risk after year one is treating the savings pot as an annual bonus. Take the same member who empties the pot every year:
- Over 20 years, R480 000 of contributions leaves the fund (R2 000 a month).
- Left invested at 9% a year, that money would be worth about R1.34 million at the end of those 20 years.
- Over 30 years the gap is R720 000 taken out against about R3.66 million forgone.
And every rand of it is taxed at 31% on the way out, where at retirement it could have been taken as part of the retirement lump sum instead. The 9% growth rate is an assumption, not a forecast; try your own numbers below.
A better use of the refill
- Leave it alone in a normal year. The pot is a safety valve, not a savings account - an emergency fund outside the fund is cheaper to use.
- If you do need it, check the cost first: the tax at your marginal rate plus the growth you give up, compared with the cost of any other way to cover the expense.
- Check your balance on your benefit statement, not on what you think should be there - growth, fees and your fund's own contribution rules change it.
How MaxWealth helps
The MaxWealth retirement tool works out what a savings-pot withdrawal costs on your own numbers: the tax at your marginal rate, and what it does to the income your savings would pay you at retirement, in today's money.
Sources
- One-third / two-thirds split, seed of 10% capped at R30 000, once per tax year, R2 000 minimum, marginal-rate tax with no tax-free amount, savings pot added to the cash lump sum at retirement: SARS - Tax directives enhancements and tax implications of the two-pot retirement system (2 September 2024).
- Tax directive and SARS debt deducted before payment: SARS - Tax implications of withdrawing from the two-pot system.
- 2026/27 tax brackets (31% marginal rate at R480 000): SARS - Rates of tax for individuals.
- Salary, contribution rate and 9% growth: an illustrative example. Totals are our own arithmetic (R2 000 a month compounded monthly at 9% a year for 20 and 30 years).
Education, not financial advice. This post explains how the rules and the arithmetic work. It does not recommend any financial product, and your own situation may differ - speak to a registered financial adviser or tax practitioner before you act. Figures were checked against the linked sources on the date above.