i What this calculator does
Answers the two questions behind every South African retirement plan: how much capital does the income I want require, and what will I actually have? It inflates your target monthly income to the year you retire, converts it into a capital figure using your drawdown rate, projects your current savings and contributions (which rise with inflation each year) at your expected return, and shows the shortfall or surplus. Then it works backwards to the extra monthly contribution, in today's rand, that would close the gap.
The default 4% drawdown is the planning convention; South African living annuities allow between 2.5% and 17.5%, and the sustainable figure depends on how long you live and what markets do. The point of the calculator is the size of the gap, not the exact rand, and the three levers it exposes: save more, retire later, or live on less.
A projection on constant assumptions. Real returns vary, tax inside and outside retirement funds differs, and the drawdown rate you can sustain depends on your lifespan and the market. Use it to size the gap, then speak to a financial planner. Not financial advice.
Frequently asked questions
How much do I need to retire in South Africa?
A common rule is 25 times your annual income need at retirement, which is the 4% drawdown rule. For R30,000 a month today, inflated at 4.5% over 30 years to about R112,000 a month, that is roughly R33.6 million. The calculator does this arithmetic with your own numbers.
Is 4% a safe drawdown in South Africa?
It is the usual planning figure and the midpoint of what living annuities allow. Higher inflation and fees than in the countries where the rule was developed argue for caution; many South African planners use 4% to 5% and review annually.
Why does the calculator increase my contributions every year?
Because most people's contributions rise with their salary. A contribution fixed in rand loses value every year; one that grows with inflation keeps its real weight. Set inflation to zero if you want a fixed contribution.
Does it include the government old-age grant?
No. The grant is means-tested and small relative to most planning targets; treat it as a buffer rather than part of the plan.
Should I use a nominal or a real return?
Enter the nominal return you expect and the inflation you expect separately. The calculator shows the implied real return; a long-run real return of 3% to 5% for a balanced fund is a reasonable planning range.
What about tax at retirement?
Lump sums are taxed on the retirement table and annuity income at your marginal rate; the calculator projects gross capital. The Retirement Lump Sum Tax Calculator on this site covers the lump sum.
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