By Andile Jonas,
Nobody’s twenties came with a retirement seminar. You were too busy figuring out rent, why airtime disappears so fast, and whether “building your career” counts as a personality trait. Retirement? That’s for a future version of you – one who, frankly, sounds like they’ve got their life together way more than you do right now.
For the last two years we’ve been watching how South Africans behave since the two-pot retirement system was introduced. It turns out this system is a mirror, reflecting exactly how financial pressure shows up at different life stages – and right now, it’s holding up that mirror to Gen Z a little earlier than expected.
Momentum Corporate’s latest two-pot behavioural data gives Gen Z something rare: a peek at their own financial future, several years before it arrives. The lesson is simple but sneaky: knowing what you should do with your money and managing to do it once real life shows up are two completely different skills.
The generational two-pot show-and-tell
When we look across generations withdrawing from their two-pot savings this isn’t really about who has more financial discipline. It’s about who’s currently getting hit hardest by life.
Millennials are the most likely group to withdraw, and the most likely to come back for seconds. Right now, they’re deep in the mid-career chaos zone: bond repayments, school fees, debt and the sensation that money evaporates the second it lands.
Gen X is playing it cooler. They’ll dip into savings if they must, but they’re not making a habit of it, the financial equivalent of “I’ll just have one slice”.
Baby Boomers are the friend who brings snacks to the party and doesn’t touch them all night, then quietly takes the leftovers home. With retirement close enough, they’re guarding their compound growth like it owes them money.
And Gen Z? Currently the least likely to withdraw anything. Some of that is just maths: Smaller balances mean less to access. But some of it is something else entirely: Momentum’s data shows only 48% of Gen Z feel like they understand how the two-pot system works.
Why millennials are dipping into the pot
Millennial withdrawal rates aren’t a sign of bad planning or impulse spending but of a generation absorbing financial pressure with the only tool they have left.
When people told us why they withdrew, 44% said debt repayment, 23% said everyday living expenses, and 20% said education costs. Nobody’s cashing out their retirement savings for a Bali trip or a new car. Even among members who knew withdrawing would hurt their future retirement, 50–60% did it anyway.
Future you has just entered the chat
For Gen Z, watching all this play out is a useful preview. The plot twists currently testing millennials are not generation-specific. They’re coming for everyone eventually. That’s just what adulthood does.
Here’s the twist nobody really warns you about: Future you is currently drafting a strongly worded message. Something like, “Hey, remember that R15 000 you pulled out at 24? That was supposed to be worth R80 000 by the time I needed it.”
Compound interest is a slow-motion favour you’re doing yourself. Every early withdrawal is you cancelling that favour before it’s even had a chance to build momentum.
The regret is fast. Momentum’s research shows that members who dipped into their savings component often felt fine for about a week, just until the tax hit landed and the real cost of lost growth became visible.
Gen Z should learn this lesson while there’s still time to do something about it. Right now, Gen Z is sitting on the one advantage nobody can buy back later: time. Compound growth needs decades to do its thing.
So, a few useful moves, while that window is still wide open:
- Keep a short-term savings buffer that isn’t your two-pot savings.
- Start small but start now. Saving consistently, even in small amounts, early in your career builds a habit that survives every future life upgrade, downgrade and surprise.
- Learn the tax consequences and growth trade-offs of the two-pot system.
The one thing you can be sure about is that adulthood will throw you a curveball you didn’t see coming. What is negotiable is whether future you inherits a safety net or an apology.
Andile Jonas, Head of Marketing at Momentum Savings
