Rates & sources
Compound growth assumes reinvested returns and no platform fees. Past performance is not a guide to future returns.
Source: FCA — Investment basics — figures refreshed at the start of each tax year.
When to use this calculator
- Before choosing between saving, investing, or increasing your monthly contribution.
- When you want to compare best-case, base-case, and cautious return assumptions.
- When you need a quick projection before making a longer-term portfolio decision.
- When you are deciding how many more years of contributions are needed to reach a specific target balance.
- When you want to see whether starting earlier versus contributing more each month produces a bigger outcome.
A realistic South Africa planning example
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
Annual Taxable Income (R)
R400,000
Annual RA Contribution (R)
R250 per month
Current Age
35
Target Retirement Age
35
After entering these figures, review projected ra balance, annual tax saving and net cost of contribution together rather than in isolation — each metric tells a different part of the story. Then rerun the tool with one input adjusted to see which variable has the biggest effect on all three outputs before you settle on a plan.
How to read your results
Projected RA Balance
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Annual Tax Saving
Review this figure alongside your gross income so you can understand the true cost of deductions and plan around any thresholds before the tax year closes. If the figure looks higher than expected, check whether any pension or gift-aid contributions could reduce your taxable income.
Net Cost of Contribution
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Max SARS-Deductible Amount
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Deductible Contribution
Use this metric to compare scenarios side by side and understand how changes in the key inputs drive the final outcome. If the figure surprises you, isolate one variable at a time and rerun the calculation to identify which assumption is responsible.
Method & assumptionsAuthoritative sources
A South African retirement annuity (RA) offers one of the most tax-efficient savings mechanisms available to individuals under SARS rules. The core benefit is that contributions are deductible from your taxable income — up to 27.5% of your greater of taxable income or remuneration, capped at R350,000 per year in the 2024/25 tax year. This means a taxpayer in the 41% marginal bracket contributing R60,000 annually to an RA effectively reduces their income tax bill by approximately R24,600, bringing the real net cost of the contribution down to around R35,400. The calculator models this marginal tax saving using the full seven-band SARS bracket structure, then projects how your fund could grow using compound annual growth across the number of years until your chosen retirement age. The growth projection assumes contributions are made at the start of each year and compounds annually — a conservative simplification suitable for planning purposes.
Beyond the annual tax deduction, the RA environment provides further tax efficiency during the accumulation phase: all investment returns inside the fund — whether interest, capital gains, or dividends — are exempt from tax while invested. This compounding of gross returns rather than after-tax returns can meaningfully increase your terminal balance over a 20- to 30-year accumulation period. However, it is important to plan for the tax that will apply when you eventually draw on your savings. The one-third lump sum at retirement is partially tax-free up to R550,000 (lifetime limit), and the compulsory annuity income drawn from the remaining two-thirds is taxed as ordinary income. Consulting a FSCA-registered financial adviser is strongly recommended to structure your RA contributions, fund selection, and retirement drawdown strategy in line with your full financial picture.
Common mistakes
- !Assuming a constant return without checking a more conservative growth rate.
- !Forgetting to include ongoing contributions, fees, or tax wrappers where relevant.
- !Focusing only on the final balance instead of the path required to reach it.
- !Ignoring the drag of platform fees or fund charges, which can reduce the real compounded return significantly over ten or more years.
- !Comparing ISA and general investment account projections without adjusting for the tax treatment of interest, dividends, or capital gains.
What to do next
- Test a cautious, expected, and optimistic growth rate instead of relying on a single projection.
- Compare this result with related savings or retirement tools before committing more money.
- Use the linked guides to understand which assumptions matter most over longer periods.
- Consider running the same figures in an ISA and a general account scenario to see how the tax treatment changes the outcome over ten or more years.
- If the projected balance falls short of your target, use the tool to work backwards — increase the monthly contribution until the result meets your goal.
Frequently asked
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End-of-article next steps
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