Retirement Savings in South Africa: How Much Do You Need?

Planning for retirement is one of the most important financial steps you can take. Whether you’re employed, self-employed, or running a business, saving enough for retirement ensures financial freedom and peace of mind when you stop working.

Our Retirement Savings Calculator helps you estimate how much you’ll need for retirement and whether you’re on track.

Why Retirement Planning Matters

  • South Africans are living longer, meaning you’ll need more savings.

  • Relying only on the state pension (SASSA) isn’t enough.

  • A proper plan ensures you can maintain your lifestyle.

  • Investing early means your money has more time to grow.

How Retirement Savings Work in South Africa

  • Retirement Annuities (RA): Tax-deductible contributions (up to 27.5% of income, capped at R350,000 annually).

  • Pension Funds & Provident Funds: Employer-based savings plans.

  • Personal Investments: Unit trusts, shares, property, or savings accounts.

When you retire, you can usually take one-third as a lump sum (taxed) and must buy an annuity with the rest to provide a monthly income.

How Much Do You Need to Retire? (Practical Example)

Example:
Thandi is 30 years old and wants to retire at 65. She needs a monthly income of R25,000 in today’s money.

  1. Estimated retirement length = 25 years.

  2. Total retirement income needed = R25,000 × 12 × 25 = R7.5 million (today’s value).

  3. With inflation and investment growth, she may need closer to R12–15 million saved by age 65.

👉 The earlier she starts saving, the less she needs to contribute monthly thanks to compound growth.

Retirement Savings Calculator

Use our calculator below to check if you’re saving enough:

Retirement Savings Calculator

See how you can retire richer and (estimated) pay less tax — projections to age 65.

Forecast (balance at age)
Assumed real annual return: %
Scenarios — scroll sideways to compare
Tip: add multiple scenarios (increase contributions slightly) and scroll to compare future balances.
Summary (quick)
Current projection
R 0
Estimated tax saving: R 0 / year
Projected balance at age 65 with current contributions.
Note: Results are estimates and depend on return assumptions, fees and inflation.

Benefits of Using the Calculator

  • Helps estimate your required monthly savings.

  • Adjusts for inflation and investment growth.

  • Shows whether your current plan is on track.

  • Provides clarity for financial decision-making.

Who Should Use the Retirement Savings Calculator?

  • Employees – checking if pension or provident contributions are enough.

  • Freelancers & Business Owners – planning independently through RAs or investments.

  • Young professionals – to see how early saving boosts retirement wealth.

  • Nearing retirement – to assess whether top-ups are needed.

10 Frequently Asked Questions (FAQs)

1. How much should I save for retirement?

A common rule is 15–20% of your monthly income.

2. What is the retirement age in South Africa?

Most people retire at 60–65, but you can retire earlier if you have enough savings.

3. Are retirement savings tax-deductible?

Yes, contributions to retirement annuities, pension, and provident funds qualify for tax deductions.

4. Can I withdraw retirement funds early?

Generally, no. Access is only allowed in special cases (resignation, retrenchment, or emigration).

5. How much can I take as a lump sum at retirement?

Up to one-third, but taxed based on SARS lump sum tax tables.

6. What happens if I don’t save enough?

You may need to work longer, rely on SASSA grants, or reduce your lifestyle.

7. What is an annuity?

It’s a financial product bought with your retirement savings that pays you a monthly income.

8. How does inflation affect retirement?

Inflation reduces purchasing power, so your savings target must include inflation adjustments.

9. Should I invest outside retirement funds too?

Yes. Diversifying with property, shares, or unit trusts gives more flexibility.

10. Can I leave retirement savings to my family?

Yes, retirement funds can be distributed to dependents and beneficiaries.

Final Thoughts

Retirement planning in South Africa is crucial for financial independence. The earlier you start, the easier it is to build enough savings.

👉 Use our Retirement Savings Calculator today to see if you’re on track for a comfortable retirement.