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Access to Retirement Funds on Emigration from South Africa

South Africans who relocate abroad face complex decisions about accessing their retirement savings under the new two-pot system. This article unpacks the rules, timelines and tax implications, helping emigrants understand how fund components work and what planning is required to avoid costly surprises.
Written by
Jenny Gordon
Published on
December 2, 2025
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South Africans are a mobile nation. Many people build their careers abroad or decide to relocate permanently for family or lifestyle reasons. But what happens to your South African retirement savings when you emigrate? The rules can be confusing, especially since the introduction of the new two-pot retirement system.

Understanding the types of retirement funds

In South Africa, retirement savings are grouped into three main categories: occupational funds (pension and provident funds, through your employer), preservation funds (pension and provident preservation) and retirement annuity funds (funds that you contribute to privately).

These funds exist to help South Africans save enough to live comfortably when they stop working and to reduce their reliance on the state in retirement. That’s why the system is supported by generous tax incentives. In exchange, there are restrictions on when and how you can access your money.

The two-pot system – A quick recap

Under the new two-pot retirement system, which came into effect recently, your retirement savings are divided into three parts:

  • Retirement component – This portion is locked in until you retire and must be used to provide an income in retirement.
  • Savings component – You can access this while you’re still working but only once a year and within limits.
  • Vested component – This refers to savings accumulated before the new system started and may have different withdrawal rules depending on the fund.

This structure is designed to give members limited flexibility while ensuring they don’t deplete their retirement capital too soon. However, things work differently when you emigrate permanently and are no longer part of the South African tax base.

What happens when you emigrate?

Once you officially cease to be a South African tax resident, you are effectively no longer part of the country’s retirement system. The law therefore allows emigrants to access their retirement savings earlier than those who remain in South Africa but there are waiting periods and conditions depending on your situation.

1. Temporary residents

If you worked in South Africa on a temporary work visa and your visa has since expired, you can withdraw your full retirement benefit immediately after leaving the country. There’s no waiting period, regardless of the fund type.

2. Individuals who emigrated more than three years ago

If you emigrated and ceased to be a South African tax resident more than three years ago, you can withdraw all your retirement savings, including the retirement and vested components without any waiting time.

“Timing your withdrawal correctly can be the difference between seamless access to your retirement savings and an unexpected tax burden.”

Jenny Gordon
Head: Technical Advice at Alexforbes

3. Individuals who emigrated within the last three years

Other members who ceased to be South African tax residents less than three years ago will have some waiting periods.

  • They will not be able to withdraw their retirement component until they have been non-residents for an uninterrupted period of three years.
  • There are some differences between the different types of funds. In a retirement annuity fund, the vested component will also be subject to the uninterrupted three-year period.
  • In a preservation fund, the latest legislative proposals will allow immediate access to the vested component if it is the first withdrawal. If the member had a previous withdrawal or has previously transferred a retirement benefit after retiring from employment, the member will also have to wait for the three-year period.

The savings component, however, is always available for immediate withdrawal.

Tax implications

Withdrawals from your retirement fund on emigration are subject to tax, but the rate and method depend on which component you’re accessing:

  • The savings component is taxed at your normal income-tax rate.
  • The retirement and vested components are taxed according to the lump-sum withdrawal tables, where higher amounts attract higher rates of tax.

Another key consideration is whether your new country of residence has a Double Taxation Agreement (DTA) with South Africa. These agreements determine where the income is taxed, in South Africa or in your new country, and help prevent being taxed twice on the same withdrawal.

Planning is essential

The rules around accessing retirement funds after emigration can seem complex, especially with the new two-pot structure now in place. Timing is crucial: the three-year waiting rule can make a big difference to when you’ll have access to your full savings and how much tax you’ll pay.

Before making any decisions, it’s important to speak to a qualified financial planner or tax specialist. They can help clarify how the rules apply to your specific situation, assist with the paperwork required by your fund and the South African Revenue Service (SARS) and ensure your withdrawal is processed in the most tax-efficient way possible.

South Africa’s retirement fund system is designed to protect long-term savings, ensuring that members have a secure income later in life. Yet for those who choose to build their future abroad, the law also provides a fair and practical route to access these funds.

Understanding how the different fund components work, the timing requirements and the tax implications can help emigrants make informed decisions and avoid unpleasant surprises down the line. With careful planning and professional advice, you can ensure that your hard-earned retirement savings continue to support your goals, wherever in the world you may be.

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