5 May 2020 at 9:46
The TaxTim lump sum tax calculator provides for BEFORE and AFTER retirement, retrenchment or death - with a marked difference between the BEFORE and AFTER options. I would just like to make sure that this is correct, as I am being told by my fund that withdrawing retirement funds (post retrenchment - but before retirement age) does not have the same rate. I have been forced to withdraw from my pension fund because of retrenchment due to "redundancy because of a general reduction in personnel" (a cost to company reduction)
My pension fund is not mentioned in my severance package, but the reason listed for my termination of employment is retrenchment.
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5 May 2020 at 11:34
The withdrawal from retirement fund may be regarded as a retrenchment benefit if it is DUE to retrenchment with the following reasons:
- Your employer is no longer trading or will stop trading soon; or
- You have become redundant because of a general reduction in personnel
If it does not form part of your severance package, you will be taxed as per our "BEFORE" option on our retirement fund lump sum calculator.
Please note this is not available if you are a member of a retirement annuity fund.