Retirement calculator
A retirement calculator for South Africa that does not stop at the pot. It projects what you will have, then spends it: the income that pot sustains, the year the money runs out if you draw more, and whether your withdrawal is even allowed under the living annuity rules.
Retirement calculator
Plotted in today’s money, so the two halves are comparable. A nominal drawdown line keeps climbing while the buying power falls, which reads as good news and is not.
How this retirement calculator works
It runs month by month through both halves of a plan. Until your retirement age, the balance compounds at the return you set and your monthly contribution is added, escalating once a year. From that date it reverses: the income you asked for is withdrawn every month, rising with inflation so its buying power holds, and whatever is left keeps growing at the second return figure.
Every number on the chart is in today’s money. That matters more than it sounds. The numbers this page opens on show why: a pot of R20.8 million at 65 reads as a fortune, but after thirty years at 5% inflation it buys roughly what R4.8 million buys today, and the income it throws off has to be judged on that basis. The nominal figure is in the tooltip for anyone who wants it.
The number most calculators skip
A living annuity in South Africa has to pay out between 2.5% and 17.5% of its capital every year. That is not guidance, it is the rule. So a plan needing 20% of the pot in year one is not a plan that runs out early, it is a plan that cannot be run. The calculator checks your first year withdrawal against that band and says so when you cross it.
The other figure worth more than the pot itself is the income it sustains. That is solved directly: the monthly amount, in today’s money, that would draw the balance to exactly zero in the year you stop needing it. Compare it against what you asked for and the gap is the honest size of the problem. Four things close it, and it is worth changing them one at a time to see which moves the answer most: save more, retire later, want less, or earn more on the money. In most South African plans the last one is the least reliable and the first two do the heavy lifting.
Contributions to a retirement annuity are deductible, which changes what a given monthly saving actually costs you. The retirement annuity calculator works out the refund. For the growth side on its own, with the fee drag as a separate number, use the investment calculator, and for the tax free portion of a plan the TFSA calculator handles the annual and lifetime limits.
Questions
How much do I need to retire in South Africa?
There is no single number, because it depends on the income you want and how long it has to last. The useful way round is to start from the income: work out what you want a month in today’s money, then find the pot that sustains it. A common rule of thumb is 300 times your monthly income, which is the 4% rule stated in South African terms, but the calculator above is more exact because it accounts for inflation, your actual return and the years you need it for.
What is the living annuity drawdown limit?
A living annuity must pay you between 2.5% and 17.5% of its capital a year. That is a hard legal band, so a plan that needs more than 17.5% in year one does not merely run out early, it cannot be run at all in that form. The calculator flags it when your numbers cross that line. The wider 0.5% to 20% band some sites still quote was a temporary covid measure from 2020 and no longer applies.
Why is everything shown in today’s money?
Because a nominal figure over a thirty or forty year horizon is meaningless. The figures this page opens on make the point: a pot of R20.8 million at 65 sounds like wealth until you notice that after thirty years at 5% inflation it buys what about R4.8 million buys now. Stating the pot and the income in today’s money is the only way to tell whether the plan actually works. The calculator shows the nominal figure too, but the decision should be made on the real one.
What return should I assume?
Two returns, not one. Before retirement a portfolio can carry more equity and therefore more risk, so people typically assume more. In retirement the same portfolio usually derisks, because a bad year early in drawdown does far more damage than the same year during accumulation. The calculator takes both separately for that reason. Whatever you pick, run it again two percentage points lower and see what breaks.
Does this include tax?
No. Income drawn from a living annuity or a life annuity is taxed as income at your marginal rate, so the figure here is before tax. Treat the income number as gross. The retirement annuity calculator on this site covers the tax side of contributions, which is the other half of the picture.
TradeIntel is an information publisher, not a licensed financial services provider. This calculator shows what the assumptions you entered produce. It is general information, not financial advice, and the return figure is your assumption, not ours. Nothing on this page is a forecast.