How and when you can access your retirement annuity when living abroad

If you’ve invested in a retirement annuity in South Africa, you’ve already made a smart move for your financial future. These investments come with great tax benefits and help you build long-term security for retirement. But what happens when you move overseas? Can you access your money, and when are you actually allowed to withdraw it?

Let’s unpack everything you need to know about withdrawing from your retirement annuity, whether you’re still a South African tax resident or you’ve completed tax emigration and become a non-resident for tax purposes.

Top 3 takeaways on accessing your South African Retirement Annuity:

1. You can only access your retirement annuity (RA) at age 55 or older (unless you’re permanently disabled or deceased).
2. However, after completing tax emigration from South Africa and maintaining non-resident status for three years, you can withdraw your full RA — even if you’re under 55.
3. SARS lump sum tax applies to your withdrawal, but double taxation agreements (DTAs) may prevent you from being taxed twice.

Read more: Cashing in your SA retirement annuity – your options before and after emigration.

Accessing your retirement annuity while living in South Africa:

Can I withdraw my retirement annuity before turning 55 in South Africa? Not usually. While you’re still a South African tax resident, your retirement annuity stays locked in until you reach 55. That’s because the Pension Funds Act is designed to protect your retirement savings and encourage long-term investment.

You can only access your RA earlier if:

• You’ve reached the legal retirement age of 55 or older
• You’ve become permanently disabled
• You’ve passed away (in which case your dependants will receive the benefit)

When you retire from your RA:

• If your fund is worth R247,500 or less, you can withdraw the full amount as a lump sum.
• If it’s more than R247,500, you can only take one-third in cash, and the remaining two-thirds must go into a living annuity that pays a regular income.

These retirement annuity withdrawal rules in South Africa apply to anyone who’s still a tax resident when they access their investment.

Accessing your retirement annuity once you’ve emigrated:

What happens to my retirement annuity after I emigrate?

If you’ve packed up and started a new life abroad, it might not make sense to leave your RA sitting in South Africa. Before 2021, you had to complete financial emigration through the Reserve Bank. Now, it’s all handled through SARS — you need to complete tax emigration South Africa instead.

Once SARS confirms you’re a non-resident for tax purposes and you’ve been living abroad for three full years, you can apply to withdraw your retirement annuity in full.

Read more: Dangerous misconceptions about financial and tax emigration from South Africa.

Can I cash in my retirement annuity before 55 if I’ve emigrated?

Yes — but only if you’ve completed tax emigration and maintained non-resident status for at least three years. This is known as the three-year rule.

To qualify to cash in your retirement annuity after emigration, you’ll need to prove that:

• You’ve been living, working and paying tax abroad for three full years.
• You no longer meet the requirements of the ordinary residence test or the physical presence test, which SARS uses to determine tax residency.
• You’ve formally ceased tax residency with SARS (you’ll need the SARS Non-Resident Confirmation Letter) as proof.

What is the ordinary residence test?

SARS uses this to decide where your real home is. They’ll look at things like where your family lives, where your assets are, whether you pay tax in another country and whether you plan to return to South Africa.

Read more: Expat Tax Matters: How does the “ordinarily resident” test work?

What is the physical presence test?

This looks at how much time you’ve physically spent in South Africa. To qualify as a non-resident, you must have spent:

• Fewer than 91 days in South Africa during the current tax year
• Fewer than 91 days in each of the previous five years
• Fewer than 915 days in total over those five years

Read more: Expat Tax Matters: how does the “physical presence” test work?

Once SARS confirms you’ve met the requirements to have your status updated from resident to non-resident for tax purposes, you become eligible to cash in your retirement annuity in South Africa.

Read more: Breaking tax residency with SA: when to apply the physical presence or ordinary residence test.

How do I withdraw my retirement annuity after I leave South Africa permanently?

Here’s how the process works:

1. Inform SARS you’re ceasing to be a tax resident in your final tax return.
2. Calculate your capital gains tax liability in South Africa (also called “exit tax”) on worldwide assets.
3. Wait for SARS to finalise and confirm your non-resident status.
4. Apply for a Tax Clearance Status (TCS PIN) to confirm your tax affairs are in order.
5. After the three-year period, submit your withdrawal request to your fund administrator.
6. SARS will issue a tax directive in South Africa to your fund administrator, confirming the tax due, which will be withheld from you.
7. Once approved, your funds (less tax and administrative fees) will be released into a non-resident bank account in South Africa, from where they can be transferred abroad.

Accessing your retirement annuity after the age of 55

Can I withdraw my full retirement annuity after 55 if I’ve emigrated?
That depends. If you’ve already started drawing an income from your RA, it’s been converted into a living annuity, which means you can’t take out the full balance as a lump sum anymore. You’ll continue to receive your annuity income, which is still taxable in South Africa.

What if I’ve turned 55 but haven’t started drawing an income yet?

If you’ve reached 55 but haven’t started taking income, you can still withdraw your full RA — as long as you’ve completed tax emigration, maintained non-resident status for three years, and SARS confirms your non-resident status.

Will I be taxed twice on my RA income?

Not necessarily. If your new country has a Double Taxation Agreement (DTA) with South Africa, you may qualify for tax relief to prevent double taxation. FinGlobal can help you check whether your country’s DTA applies and ensure you’re taxed correctly.

Retirement annuity withdrawal tax implications to keep in mind

When you withdraw your retirement annuity, SARS treats it as a retirement lump sum, taxed according to the retirement lump sum tax table. Your fund administrator will apply the tax rate stated in the tax directive issued by SARS.
If you’re a non-resident, it’s vital that the correct withholding rate is applied — and that you’re not taxed twice. FinGlobal can help you handle the tax directive and clarify any double taxation risks.

Read more: Tax on retirement annuity withdrawal in SA – what expats need to know.

Why completing tax emigration matters when withdrawing your South African RA after moving overseas

If you’ve left South Africa and want to access your retirement annuity from abroad, completing tax emigration is an essential step. Until SARS officially recognises you as a non-resident for tax purposes, your RA remains locked in, just as it would for someone still living in South Africa.
Once your non-residency status is confirmed and you’ve maintained it for three consecutive years, you can withdraw your full retirement annuity and transfer the proceeds overseas. You’ll still be taxed in South Africa on the withdrawal, but only on South African-sourced income going forward — not your worldwide earnings.

Becoming a non-resident for tax purposes helps you take control of your finances, simplifies your tax obligations, and ensures you can manage and grow your retirement savings from wherever you choose to live.

FinGlobal: retirement annuity encashment specialists

At FinGlobal, we make the process of withdrawing your retirement annuity from South Africa smooth and stress-free. Our team of cross-border financial specialists will guide you through the tax emigration process, help you obtain your tax clearance, and manage your international money transfer once your funds are released.

Ready to withdraw your retirement annuity? If you’ve been living abroad for more than three years and have completed tax emigration, you might already qualify to access your RA.

So what are you waiting for? Let FinGlobal handle everything. To find out more about accessing your retirement annuity from abroad, leave your contact details below and we’ll be in touch to answer your questions.