Retirement Calculator ☆ Stoor

Three tax advantages, and most people use one

Retirement saving in South Africa is unusually well supported by the tax system, and the advantages compound on each other:

1. Contributions are deductible — 27.5% of the greater of remuneration or taxable income, capped at R430,000 a year (raised from R350,000 in Budget 2026). At a 39% marginal rate, every R1,000 contributed costs you R610 after tax;
2. Growth inside the fund is untaxed — no dividends tax (20%), no interest tax, no CGT. Over decades this is the largest of the three, and it is entirely invisible on a statement;
3. Favourable treatment at retirement — the lump-sum table carries a cumulative R550,000 tax-free portion, though most of the pot must provide an income.

Model the deduction's immediate value in the tax refund calculator, and your bracket in the income tax calculator.

Time matters more than the rate

Change the years in the calculator above and watch the outcome move. Retirement projections are dominated by how long money compounds, not by the return you assume.

A decade you did not use costs more than any fee or rate difference you will ever negotiate — which is why starting small now genuinely beats starting properly later. Test the same contribution over twenty and thirty years in the compound interest calculator.

The three things that quietly shrink the result

1. Withdrawing when you change jobs

The single most damaging retirement decision available. Cashing out at resignation is taxed under the harsher withdrawal table and — far worse — restarts the compounding clock. Preserve it instead. The same logic applies to the savings pot: see the two-pot withdrawal calculator, where the tax is only the visible cost.

2. Fees, honestly assessed

Fees matter over decades, and the popular soundbite — that a percentage point of fees costs you a third of your pot — overstates it by roughly double for a realistic contribution pattern. That does not make fees unimportant; it means you should compute the difference on your own numbers rather than react to a slogan. Run your projection at two fee levels and compare.

3. Inflation

The projection shows nominal rands. What matters is what that sum buys in thirty years — so be conservative with the return you assume, and remember that a pot which looks large today may not feel large then.

How much is enough?

The useful question is not "what is the pot?" but "what monthly income will it sustain, and for how long?" — which is what the calculator above models.

Two sanity checks worth applying:

• Replacement ratio. Most planning aims to replace a substantial share of pre-retirement income — you will spend less on some things (commuting, the bond, supporting children) and more on others (healthcare above all). Work from your actual expected expenses rather than a rule of thumb;
• Longevity. A pot that lasts twenty years is not the same as one that lasts thirty. Plan for a long retirement, because the alternative risk — running out — has no remedy at 85.

Building it in the right order

1. Employer fund first, especially where contributions are matched — a match is an immediate, guaranteed return nothing else offers;
2. Clear high-cost debt. Unsecured credit is capped at 28% and cards at 21%; no investment reliably beats retiring those — use the debt payoff planner;
3. An emergency fund, so a shock does not force you to raid long-term savings;
4. Use the RA deduction if your marginal rate is high — the higher the rate, the bigger the discount;
5. Fill the TFSA — R46,000 a year, R500,000 lifetime, tax free coming out. See the TFSA calculator;
6. Increase contributions with every raise, before the money joins your spending.

Frequently asked questions

What return should I assume?

Deliberately conservative, and after fees. A projection built on an optimistic return is a wish with a chart.

RA or TFSA?

Both, usually. An RA gives a deduction now (up to 27.5%, capped R430,000) but locks the money and taxes the income later; a TFSA gives no deduction but comes out tax free. Higher marginal rates favour the RA at the margin.

I am starting late — is it worth it?

Yes. The levers are contribute more, work longer, or spend less in retirement — and starting today is strictly better than starting next year.

What happens to my fund if I change jobs?

You can preserve it, transfer it, or withdraw it. Withdrawing is taxed harshly and costs decades of growth — preserving is almost always the better decision.

Is the two-pot system a reason to worry?

No — it was designed to give emergency access without letting people empty their retirement savings. The retirement pot stays locked, which is the point.

The 27.5% / R430,000 deduction limit and the R550,000 cumulative lump-sum tax-free portion are the 2026/27 values. Projections are illustrative and assume constant returns and uninterrupted contributions. General information, not financial advice.