Two-pot withdrawals when you live abroad: your options in 2026
The two-pot system changed what expats can reach and when. What you can take from the savings pot now, and how the three-year rule frees the rest.
Since the two-pot retirement system arrived, every retirement fund member has a savings pot, a retirement pot, and a vested pot holding the old money. For South Africans abroad, the rules differ depending on whether you have formally ceased tax residency, and the difference is worth planning around.
What anyone can take: the savings pot
One withdrawal per tax year, minimum R2,000, up to the full savings pot balance. It is taxed at your marginal rate, not the friendlier lump sum tables, and the fund will obtain a tax directive before paying out. If you are abroad but still a tax resident, this is the only early access you have.
What non-residents can take: everything, after three years
Once you have been a confirmed non-resident for three consecutive years, you may withdraw your full retirement annuity before retirement age. The withdrawal is taxed on the lump sum tables, and moving the proceeds offshore requires an Approval for International Transfers from SARS, which in turn requires your Notice of Non-Resident Tax Status letter.
The clock only starts when your non-residency is established with SARS. Every year spent abroad without formalising your status is a year that does not count toward the three. This is the most expensive procrastination in expat tax.
Sequencing matters
- Cease residency formally, with the effective date evidenced and backdated where the facts support it.
- Keep the non-resident letter safe; funds and SARS will both want it.
- After three years, apply for the withdrawal with a tax directive, then the AIT to remit the proceeds.
- Plan the tax year of withdrawal: the lump sum tables are progressive, and timing can change the rate.
We run this entire sequence for clients, from the residency application through to the rand landing in a foreign account. If your move abroad is permanent, the best time to start the clock was when you left. The second best time is now.
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Book a free call and we will turn this into next steps for your situation.