Question:
I am due for my pension next year February,I am currently with the 10x fund,I want to know if I can take all my money in cash and pay it into my bond.
Answer:
Danelle, The rule is as follows: if you belong to a pension fund, you can only cash in one-third at retirement (ie once you have reached normal retirement age per the fund rules); you must use two-thirds to buy an annuity. The one-third cash lump sum is taxed except for the first R500 000. You can use the balance to pay down your bond, if you want. If you belong to a provident fund, you can take the full amount as a cash lump sum (again, net of lump sum tax). If you resign rather than retire from a pension fund, you can take the whole proceeds as cash, again net of lump sum tax but you then forfeit the R500 000 tax-free portion (only the first R25 000 will not be taxed).
