Keep hands out of cookie jar

WITHDRAWING SOME OF YOUR RETIREMENT SAVINGS SHOULD BE THE LAST THING

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As the festive season heats up with more intensity, cash-strapped consumers find it increasingly difficult to say no and walk away when they are lured by Christmas jingles and shelves of things to buy. That is when they remember the stash in the savings pot available under the two-pot retirement system.

However, withdrawing some of your retirement savings under the two-pot retirement system should be the last thing on your mind and you should resist the lure of the two-pot cookie jar this festive season, says Richard Carter, head of assurance at Allan Gray.

With the festive season fast approaching, consumers may be considering using their two-pot retirement system savings component to splurge, but Carter cautions against dipping into your retirement investments for holiday spending, as this could undermine your long-term retirement goals.

The recent introduction of the two-pot retirement system in South Africa may provide consumers with high levels of temptation to withdraw retirement savings to pay for discretionary festive season spending, he says.

South Africa's two-pot retirement system, introduced on 1 September, divides all future contributions from retirement fund members into two components: a savings component and a retirement component.