Things you SHOULDN'T do when the two-pot retirement system comes into law next month

Africa Melane is joined by Nelis Brink, Certified Financial Planner and Director at PSG Wealth R21. 

Listen below:

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Don't touch it, let it grow. (And definitely don't resign!)

That's the advice being given to South Africans ahead of the introduction of the two-pot retirement system coming into force on 1 September.

Under the new rules, employees may access limited portions of their pensions without resigning.

Permitted withdrawals will come from the ‘savings pot’ portion of the fund. Only a maximum of 10% (up to R30,000) can be withdrawn.

Brink advises against people either stopping contributions or even resigning, to avoid the new system.

"Please don't resign, please don't withdraw your money. It doesn't matter how much you've got in your fund, you cannot afford to spend tomorrow's money."

- Nelis Brink, Certified Financial Planner and Director - PSG Wealth R21

Brink says there is a misconception that the 'savings pot' will grow at a slower rate than the rest of the pension fund.

Not true, he says.

"The money will be invested in the same fund...your fees will stay the same, it's simply a different set of record keeping."

- Nelis Brink, Certified Financial Planner and Director - PSG Wealth R21

Another reason some people are considering withdrawing the money, says Brink, is to invest somewhere else.

Don't do it, he says.

"The problem is the tax. If you pay the marginal income tax on the withdrawal...there's no investment you can make that will make up for that tax already paid."

- Nelis Brink, Certified Financial Planner and Director - PSG Wealth R21

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Two-pot retirement system: Read this before you withdraw your funds