Retirement Funds: Consider them your tax-advantaged savings vehicles for later life. You get tax deductions while contributing, but the critical point is that the money gets taxed when you withdraw it. This can happen as a monthly pension (taxed based on specific rates) or a lump sum withdrawal.

Lump Sum Withdrawal Benefits: This is when you take out a portion (or all) of your retirement savings upfront. Here’s where SARS steps in: you’ll pay tax on this amount, but there’s good news! A portion (up to one-third) is tax-free, and the rest attracts a special tax rate (generally lower than normal income tax). So, while paying some tax is inevitable, it’s less than what you’d pay on regular income.