Retirement Projection Calculator
Project your retirement fund balance and monthly income at retirement.
Last reviewed: Tax year: 2026/2027Source: SARS — Retirement contributions
The retirement savings problem in South Africa
Only about 6% of South Africans can afford to retire comfortably, according to National Treasury. The median retirement saver in SA retires with enough to sustain themselves for about 5 years at their pre-retirement income — against a retirement that may last 20–30 years.
The gap between where most savers are and where they need to be is large, but it is largely a problem of starting late and saving too little — two things that are fixable with the right number in front of you. That’s what this calculator is for.
The tax deduction — 27.5%, capped at R430,000
Contributions to registered retirement funds (pension, provident, or retirement annuity) are tax-deductible up to 27.5% of taxable income, subject to an annual cap of R430,000 (increased from R350,000 in 2026/2027 — the first change since 2016). This is one of the most valuable tax breaks available to SA taxpayers.
| Annual salary | 27.5% contribution | Marginal rate | Tax saved |
|---|---|---|---|
| R200,000 | R55,000 | 26% | ≈ R14,300 |
| R400,000 | R110,000 | 31% | ≈ R34,100 |
| R600,000 | R165,000 | 36% | ≈ R59,400 |
| R1,000,000 | R275,000 | 41% | ≈ R112,750 |
| R1563636 (cap limit) | R430,000 (capped) | 45% | ≈ R193,500 |
Unused deductible contributions roll forward to future tax years. If you contributed R200,000 and were only allowed to deduct R165,000 (27.5% of your income), the R35,000 excess carries forward and can be used in the next year.
How compound growth works over long periods
The most powerful force in retirement savings is time. The same monthly contribution produces vastly different outcomes depending on when you start:
| Start age | Years invested | Nominal value at 65 | Real value (6% CPI) |
|---|---|---|---|
| 25 | 40 | ≈ R15,900,000 | ≈ R1,550,000 |
| 30 | 35 | ≈ R9,580,000 | ≈ R1,200,000 |
| 35 | 30 | ≈ R5,730,000 | ≈ R930,000 |
| 40 | 25 | ≈ R3,370,000 | ≈ R700,000 |
| 45 | 20 | ≈ R1,920,000 | ≈ R510,000 |
Regulation 28 — what your retirement fund can invest in
Pension and provident funds must comply with Regulation 28 of the Pension Funds Act, which caps the percentage that can be invested in equities, property, and offshore assets. Retirement annuities (RAs) also follow Regulation 28.
| Asset class | Maximum allocation |
|---|---|
| Equities (SA + global combined) | 75% |
| Property (SA + global combined) | 25% |
| Offshore assets (global equities, bonds) | 45% |
| Single issuer (corporate bonds, etc.) | 10% |
| Hedge funds and private equity | 15% combined |
The long-term nominal return assumption used by most SA actuaries for a balanced Reg 28 fund is 10–12% per annum. Conservative planning uses 10%. With 6% CPI, the real return is approximately 3.8–5.7% — enough to grow wealth, but much slower than nominal figures suggest.
Worked examples
Age 35, R200,000 saved, R5,000/month — am I on track?
Earning R50,000/month. Target: R30,000/month income in retirement (today’s money). Retire at 65. 10% return, 6% inflation.
- Current savings
- R200,000
- Monthly contribution
- R5,000
- Years to retirement
- 30
- Projected value at 65 (nominal, 10%)
- ≈ R11,900,000
- Real value in today’s money (÷ 1.06³⁰)
- ≈ R2,070,000
- Monthly income at 4% drawdown (today’s R)
- ≈ R6,900/month
- Target income
- R30,000/month
Age 45, R800,000 saved, R15,000/month — retiring at 65
Senior professional. 10% return, 6% inflation.
- Current savings
- R800,000
- Monthly contribution
- R15,000
- Years to retirement
- 20
- Projected value at 65 (nominal)
- ≈ R15,600,000
- Real value (÷ 1.06²⁰)
- ≈ R4,870,000
- Monthly income at 4% drawdown (today’s R)
- ≈ R16,230/month
The lump-sum tax at retirement — first R550,000 free
Taking R800,000 lump sum at retirement. First lump sum ever.
- Lump sum amount
- R800,000
- Tax-free portion (first R550,000)
- R550,000
- Taxable amount (R800,000 − R550,000)
- R250,000
- Tax (18% on R250,000)
- R45,000
- Net lump sum
- R755,000
The 4% safe withdrawal rate
The 4% rule (from US research, adapted for SA) says you can withdraw 4% of your portfolio in year one and increase it with inflation each year, with a high probability of not outliving your money over a 30-year retirement. In SA, given higher inflation and higher volatility in local assets, some planners use 3.5%.
To sustain R50,000/month in retirement using the 4% rule: R50,000 × 12 ÷ 0.04 = R15,000,000 required. In today’s money. At 6% inflation over 25 years, that is a nominal R64,000,000. That’s the target number many people never calculate.
How this calculator works
Enter your current age and target retirement age, existing retirement savings, monthly contribution, annual salary (to compute the tax benefit of your contribution), expected annual return, and expected inflation. The calculator projects your retirement pot in both nominal and real (today’s money) terms, estimates the monthly income you could draw at a 4% rate, and shows the tax saving on contributions at your marginal rate.
Sources
Frequently Asked Questions
A common guideline is 15–17× your annual income. If you earn R400,000/year, target R6–7 million. The 4% drawdown rule suggests your fund should be 25× your desired annual retirement income.
Contributions to pension, provident, or retirement annuity funds are tax-deductible up to 27.5% of the greater of your remuneration or taxable income, capped at R430,000 per year (2026/2027).
SA equities have historically returned 10–15% nominal (5–10% real). Balanced funds: 8–12%. After inflation of ~5%, use 5–7% for conservative real return projections.