As the 1 September deadline (when the two-pot retirement reform goes live) draws closer, much consumer education needs to be done.

A lot of the focus has been on how much you will be able to withdraw and how often, how much tax you will pay and how it will all work practically.

However, a more pressing point that many are missing is the ultimate effect any withdrawals will have on your retirement savings.

Although it has widely been reported that it will affect your retirement, seeing the actual numbers is far more impactful.

Jaya Leibowitz, manager of retail legal at Allan Gray, points out that any withdrawals you make are included in your gross income for that year, which means it could push you into a higher tax bracket. She provided the following example:

Sally is a 35-year-old full-time employee with a taxable income of R370,000. Based on the 2024/25 income tax table, her tax liability will amount to R59,997 (R42,678 + 26% of the amount above R237,100 - primary rebate of R17,235).

If Sally decides to access a savings withdrawal benefit of R25,000, she will be pushed into a higher tax bracket and will be liable for tax of R67,722 (R77,362 + 31% of the amount above R370,500 - primary rebate of R17,235).

Pieter Koekemoer, head of personal investments...