Can You Access Your Retirement Savings?

Member Newsletter

Quarter 3 • 2021

There are some of you that may be taking financial strain in the wake of the pandemic and as a result of the current economy. It is at times like this that you may want to access your retirement fund savings. However, please note that you do not have access to your retirement fund savings while you are employed by Woolworths. Your savings are invested for your future and the longer you save, the more money you and your family will have when you retire.

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CAN YOU ACCESS YOUR RETIREMENT SAVINGS?

Due to the current economy and in the wake of the pandemic, you may be taking financial strain AND WANT TO ACCESS YOUR RETIREMENT FUND SAVINGS.
We have had requests from members asking if they can access their retirement fund savings. Some say that they saw on TV or read in the news media that they may be able to access their money.
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You DO NOT have access to your retirement fund savings while you are employed by Woolworths.

You only have access to your full retirement savings:
  • if you leave Woolworths; or
  • when you retire.

If you leave Woolworths

If you leave Woolworths, you have two main options for your retirement savings:
  • you can take it in cash; or
  • you can preserve your savings.

If you take your retirement savings in cash:

  • Tax will be deducted before it is paid to you.
Example: Joe’s retirement savings are R100 000. If he takes this in cash, the maximum he may receive is R86 500 because at least R13 500 will have to be paid to SARS.
  • If you withdraw your savings, you will have less money to provide yourself with a pension when you retire.
  • You will lose the opportunity to earn compound interest on your savings and grow your money.

If you preserve your retirement savings:

  • Your full benefit (your contributions, the company’s contributions plus your investment returns) will be preserved and is tax free.
Example: In preserving his retirement savings, Joe would then keep and invest the R13 500 that he would have paid in tax to SARS. This means he will have more money when he retires.
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When you retire

When you retire, you can take up to one third of your retirement savings as a cash lump sum. The cash lump sum is taxable. However, the first R500 000 is tax free – provided you have not previously withdrawn from any retirement fund.

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