• Updated 11 August 2025
Thinking of dipping into your retirement pot? South African law only lets you do it under strict conditions. Here’s what you can and can’t do—straight to your phone.
- When you ARE allowed to withdraw
| Situation | Age rule | How much you can take | Tax bite |
|---|---|---|---|
| Retrenchment / Dismissal | Any age | Full vested value in a provident or retirement annuity (RA) once-off | First R550 000 tax-free, then sliding tables |
| Resignation | Any age | Pension fund → max one-third cash; two-thirds must buy an annuity (unless total is < R247 500) | Withdrawal lump-sum tax table |
| Retirement | 55 or older | Pension: one-third cash + two-thirds annuity OR full cash if < R247 500 | Retirement lump-sum tax table (more generous) |
| Severe ill-health / Permanent disability | Any age | 100 % cash or annuity—medical board certificate required | Retirement table |
| Financial hardship (living annuity only) | Any age | Up to 17.5 % of remaining capital once per tax year | Normal income tax |
- What you CAN’T touch
- Preservation fund money before age 55 unless retrenched, dismissed or emigrated.
- Living annuity capital—only the annuity income stream is payable monthly.
- How to start the withdrawal in 3 taps
- Log in to your fund’s member portal or app (e.g., Alexander Forbes, Allan Gray, Old Mutual).
- Upload: ID, latest payslip, bank confirmation, medical certificate (if disability).
- E-sign the tax directive request; SARS issues the directive within 7–14 days.
- Tax-free hacks
- R550 000 lifetime retirement lump-sum is tax-free—use it wisely.
- Retrenchment: first R550 000 + Severance formula = up to R1.05 m can be tax-free.
- Common SA Google searches
“Can I withdraw pension fund if I resign South Africa”
“How much tax on R500 000 pension withdrawal”
“Financial hardship withdrawal living annuity”
“Retrenchment pension payout tax calculator” - Red-flag checklist
☐ Check if you have outstanding loans against the fund—they’ll be deducted first.
☐ Confirm vested vs. non-vested portions—some newer funds have two pots.
☐ Speak to a certified financial planner before submitting—mistakes cost tax.
Bottom line
You can cash out early, but only for retrenchment, resignation, disability, retirement or hardship—and the taxman always takes a bite. Use your fund’s app or WhatsApp helpline to start the process, then double-check the numbers before you hit “submit”.