Two pots, one future: How to save and retire smarter

You’ve seen the headlines. Maybe your HR department sent an email. From 1 September 2024, the “two-pot” retirement system kicked in. But what does that actually mean for you, and your money? If you're feeling unsure, you’re not alone. And if you're already eyeing that “accessible” pot for a little extra breathing room, you're really not alone. Let’s slow it down and unpack it, in plain terms.

Two pots, two different roles

Here’s how it works:

Savings Pot: A small slice of your contributions (one-third) that you can dip into once a year, but only if you really need to.

Vested Pot: This includes everything you’ve saved up until 31 August 2024. So, it’s not affected by the new two-pot rules.

Retirement Pot: This money (two-thirds) will stay locked away and growing until you retire.

Sounds simple, but here’s where it gets tricky

It’s tempting to dip into it. But that decision costs more than you think. Let’s be real: life is expensive.

When the interest rate goes up, your car breaks down, or a family member needs help, that Savings Pot starts to look like a lifeline.

But here’s the catch.

Every rand you take out now slows down growth in both pots. That means less freedom, less choice, and more stress for future you. Here’s what that looks like in numbers:

Table

Scenario Value after 20 years at 7% Difference Leave R100 000 untouched R386 968 — Withdraw R20 000 now R309 575 -R77 393 Takeaway: Even a small early withdrawal could cost you nearly R77k+ in long-term growth.

A security guard helping a woman carry her groceries inside. She’s chatting about the two-pot system with her mom on her cell phone.

So, what should you do instead?

Let’s make this simple. Here are 5 smart moves to protect your two pots and make sure future-you thrives:

One: Know your benefits and use them

Most people don’t realise their retirement fund may offer additional free tools like emergency savings that can help them save money and stress.

Two: Know your emergency number

Keep around three months’ worth of essential expenses outside your annuity, so you don’t need to dip into your invested capital when life throws a curveball.

Three: Automate your salary bumps

The moment your income increases, automate at least half of that raise into your annuity contributions before lifestyle creep even notices.

Four: Start planning five years before retirement

Start planning five years before retirement: From fees and tax strategies to how your income will grow each year - these decisions need time. Begin the conversation early so you can retire on your terms.

Five: Review your employee benefits every year

Life changes, and so does the economy. Check in annually to see if your investment choices and monthly drawdowns still make sense. A Momentum benefit counsellor can help you adjust the plan if needed, so you stay in control of your retirement journey.

So now that you understand the two-pot system better let’s focus on how to keep your future “pay-days” safe.

A retired man standing beside his overheated, broken-down car.

REMEMBER: Retirement isn’t the end - it’s a journey that needs to be worked over the years. With the right annuity, you can have a steady income that keeps up with the cost of living (and maybe even help fund that post-work dream car).

Retirement benefit counsellors can guide you through the options, from guaranteed to living or blended annuities, so you can make confident choices about your future.

Our final thoughts

You worked hard for your money. So, before you dip into any pot, pause. Every choice you make today shapes the kind of life you’ll live in retirement. So:

Protect what you’ve built.
Plan for what matters.
And let your money grow into the kind of future you actually want.

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Two pots, one future: How to save and retire smarter

Two pots, two different roles

Sounds simple, but here’s where it gets tricky