This option will reduce your income in retirement
When you leave your employer, you have the option of making a once-off withdrawal of some or all of your retirement savings. If you withdraw a portion, the balance will need to be transferred to another retirement product, for example the Allan Gray Retirement Annuity Fund or your new employer's retirement fund.
Reasons this option may not be suitable for you
- Withdrawing from a retirement fund reduces the tax benefits you enjoy in the fund.
- Pre-retirement withdrawals are taxed significantly more than cash lump sums at retirement.
- Using your retirement savings before you retire may affect your lifestyle in retirement.
All previous withdrawals (including retirement cash lump sums and severance benefits) are taken into account when calculating how much tax you will pay.
|How much you withdraw
||How much tax you will pay
|R0 - R25 000
|R25 001 - R660 000
||18% of the taxable amount above R25 000
|R660 001 - R990 000
||R114 300 + 27% of the taxable amount above R660 000
|R990 001 and above
||R203 400 + 36% of the taxable amount above R990 000
Your withdrawal amount is significantly reduced by tax
Example 1: If you take R150 000, you will pay R22 500 to SARS (18% of R125 000).
Example 2: If you take R800 000, you will pay R152 100 to SARS (R114 300 + R37 800).
A withdrawal instruction cannot be cancelled
Many retirement fund members change their minds about making a withdrawal once they see how much they will be taxed. It is important to realise that you cannot cancel your instruction once you have submitted it.
We apply for a tax directive when we receive a withdrawal instruction. In terms of legislation, once a tax directive has been applied for the instruction cannot be cancelled. The taxable amount stipulated on the directive is final and will be paid to SARS from your account. The balance of your requested withdrawal amount will be paid to you.
Complete the following steps:
1. Complete and sign the Umbrella Retirement Fund Member Exit Instruction.
2. Any remaining balance must be transferred to another retirement fund.
3. Email the above forms to firstname.lastname@example.org.
We will contact you once we have received your forms.
Please note: once we receive your withdrawal instruction and all required documents, we will apply for a tax directive from SARS. The tax directive may not be altered and your withdrawal instruction cannot be cancelled.