How much can I contribute tax-free in South Africa?

Contributions to pension, provident and retirement annuity funds are tax-deductible up to 27.5% of the greater of taxable income or remuneration, capped at R350,000 per tax year. Contributions above the cap aren't lost — they roll over and can be deducted in future years or offset against lump sums.

How is the retirement pot projected?

Each year the tool adds your annual contribution to the existing balance and grows the total by your expected investment return, compounding to your retirement age. This is the standard future-value-of-a-growing-annuity calculation that retirement-fund projections rely on.

What drawdown rate is safe?

A common rule of thumb is to draw 4% to 5% of the pot in the first year, then adjust for inflation. South African living annuities legally allow 2.5% to 17.5%, but drawing near the top risks depleting capital. The tool uses your chosen rate to estimate first-year income.

Does this account for tax in retirement?

No. The income shown is the gross drawdown before income tax. Annuity income is taxed as ordinary income in South Africa, and the first portion of any lump sum at retirement is tax-free under the retirement lump-sum tables. Treat the figure as pre-tax.

Should I include the state old-age grant?

This tool projects only your own fund. South Africa's means-tested state old-age grant is modest and phases out above an income threshold, so most savers shouldn't rely on it as primary income. Add it separately if you expect to qualify.

South Africa Pension & Retirement Calculator

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A comfortable South African retirement is built mostly from your own fund — pension, provident or retirement annuity — because the state grant is small and means-tested. This calculator compounds your contributions and growth to your retirement age, applies the 27.5% deductibility cap, and estimates your first-year income.

How it works

The fund grows each year by adding your contribution and then applying investment growth:

contribution = income × contributionRate%   (deductible up to 27.5%, max R350,000)
each year:  balance = (balance + contribution) × (1 + growth%)
repeat for (retirementAge − currentAge) years
firstYearIncome = finalBalance × drawdownRate%

The tool flags when your contribution exceeds the annual deductible cap, since the excess isn’t immediately tax-deductible (it carries forward).

Example and tips

A 35-year-old earning R600,000 a year, contributing 15% (R90,000, within the cap), with R500,000 already saved, 9% growth and retiring at 65 builds a pot of roughly R15.4 million in nominal terms, giving about R616,000 (5% drawdown) of pre-tax income in the first year. Increasing your contribution rate early has an outsized effect because of three extra decades of compounding — and contributions up to 27.5% of income reduce your tax bill today.