South Africans Living Abroad: A New Perspective On Retirement Savings

South Africans Living Abroad: A New Perspective On Retirement Savings

What Can Expat South Africans Do With Their Retirement Savings, Annuity & Pension Money? 

It’s one of the greatest lessons we get to teach our children – saving up for the future. It is a truly crucial mindset which is deeply ingrained in the psyche of South Africans and people of other nationalities around the world. But perhaps even more so for immigrants. 

The thing is, for South Africans who have emigrated from their country, there will always be a sense of loss. Saving is not simply a matter of being prepared – it is also about holding on to those things we don’t want to lose and keeping them close.

It’s therefore no surprise that most of us are reluctant to touch our hard-earned retirement savings. It is a constant – and something we can rely on. It is something we’d not want to sacrifice for anything.

5 Reasons Why Cashing In Your Pension Could Be The Best Decision

Seems highly unlikely, doesn’t it? How could you stand to gain from touching your well-preserved nest egg? After all, it goes against everything you’ve been taught.

Well, there are several reasons for why early withdrawal could be beneficial to South Africans living abroad. We consider five reasons why you could benefit from retirement fund transfer as an SA expat.

You are allowed to transfer the proceeds of your retirement savings offshore

South African emigrants are lawfully allowed to cash in the proceeds of their retirement savings – whether pension or provident funds OR retirement annuities – before retirement age. The proceeds of such funds can then be transferred offshore to use for any purpose.

Reinvesting your funds offshore allows you to earn interest in a stronger currency

Most South Africans immigrate to countries with stronger and more stable economies than South Africa. Reinvesting your retirement savings in an equivalent pension in your new home or even your local bank account could stand to increase the value of your savings due to the better performance of your local economy and its currency.

You could even be rewarded for reinvesting your money in a local pension

You could stand to increase your retirement savings if you reinvest your funds in certain countries. This means that your South African pension could be worth more when you deposit it into a local pension even after the deduction of your withdrawal tax. Countries which are part of the United Kingdom offer a pension incentive scheme with monetary rewards for reinvesting foreign pensions in UK-based retirement schemes.

Keeping your money close saves you the administrative hassle

One of the biggest drawbacks of leaving your money in South Africa is the red tape and administrative hassle required for making fund or policy enquiries, authorising amendments, withdrawals, claims or transfers.  Moving your funds to your time zone and jurisdiction ensures that all your money is governed by the same rules and makes it easier to administer policy changes or withdrawals.

Should you return to South Africa one day, you’ll receive your pension tax-free

Early withdrawal from a South African retirement fund unfortunately carries early withdrawal tax. But for those of us living abroad, this also save us some headaches should we decide to return to South Africa one day. Since you have already been taxed on these savings, you won’t be liable for subsequent tax when returning to South Africa.

Let Rand Rescue assist you in moving your retirement money abroad

You see, although saving up for the future normally requires the discipline to leave your funds untouched – these rules don’t necessarily apply to South Africans who have moved to other countries.

Talk to us about rescuing your rands. Leave your details below and we’ll get back to you.


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