Retirement Gap Calculator
Most South Africans retire with less than halfthe income they need. Enter your current savings, monthly contributions and retirement income target — and see exactly whether you're on track, and if not, how much extra you need to save.
Your situation
SA pension funds typically allow access from age 55.
Use a conservative figure — SA financial planners suggest age 85–90.
Total value of your RA, pension fund, provident fund, or TFSA today.
Total monthly going into RA, pension fund, or retirement savings.
In today's rands — the calculator adjusts for inflation.
Assumptions
Net of fees. 10% is broadly representative of a SA balanced fund.
Lower than pre-retirement as portfolio gradually de-risks.
Long-run SA CPI — SARB targets 3–6%, mid-point is 4.5–5%.
You have a retirement gap of
R 408 699
shortfall — your projected pot covers 96% of the target
Projected pot
R 10 805 456
at age 65
Target pot needed
R 11 214 155
funds 20 yrs of income
Target income
R 86 439
in future rands/month
Pot runs out
Age 83
18 of 20 yrs
To close this gap, you need to contribute an extra
That's 6% more than your current contribution, invested over the next 30 years.
Where your projected pot comes from
Current savings
R 3 967 480
37% of pot
Monthly contributions
R 6 837 976
63% of pot
Total put in
R 1 280 000
Projected savings growth to retirement
Dashed line = target pot needed. Green bars = growth; grey = contributions.
Data: State Old Age Grant: SASSA, April 2026 (R2,090/month) · SA long-run equity return assumptions: Allan Gray, Coronation, Ninety One published fact sheets · PV annuity-due formula — standard financial mathematics · See methodology
How the calculation works
The calculator runs a two-phase model. Phase 1 (accumulation): your current savings and monthly contributions compound at the pre-retirement return until retirement age, using the annuity-due formula. Phase 2 (drawdown): it calculates the pot needed to fund your inflation-adjusted target income for the full retirement period, using a present-value-of-annuity formula.
The target monthly incomeis entered in today's rands but inflated forward to retirement. If you want R20,000/month now and inflation runs at 5%, you'll need R32,578/month at retirement in 10 years. The target pot is the lump sum that, invested at the post-retirement return, funds that growing income for your full retirement duration.
The required extra monthlyis the additional contribution — on top of what you're already saving — needed to hit the target. It's computed by solving the annuity-due payment formula for the remaining gap after your current savings compound forward.
SA retirement benchmarks
The R5m pot
Age 35 → 65 · R3k/month · 10% return
R3,000/month from age 35 with R200k already saved grows to R6.7m by 65 — enough to fund R35k/month for 20 years.
Median SA worker
Age 40 → 65 · R1.5k/month · 10% return
Most SA workers save too little too late. R1.5k/month from 40 with R50k saved gives ~R1.4m — funding R8k/month for 15 years.
Late starter
Age 50 → 65 · R10k/month · 10% return
Starting late but contributing heavily. R10k/month from 50 can still build R2.3m — enough for R13k/month for 20 years.
R20k/month in retirement
R20k target · 20-year drawdown · 7% post-return
To draw R20,000/month (future rands) for 20 years at 7% post-retirement return, you need a pot of approximately R2.6m.
Frequently asked questions
How much do I need to retire in South Africa?
The most common rule of thumb used by SA financial planners is that you need a retirement pot of 15–17 times your final annual salary. If you earn R40,000/month at retirement, that implies a pot of R7.2m–R8.2m. Why? Because at a 6–7% post-retirement drawdown rate on a balanced fund, that pot sustains R40,000–R50,000/month for 20–25 years before running dry. The calculator above uses a more precise method: it calculates the present value of your desired monthly income over your full retirement period at your expected post-retirement return rate.
What is a realistic monthly income target for retirement in SA?
SA financial planners target a 'replacement ratio' of 75–80% of your final net (after-tax) salary. If your final take-home is R30,000/month, you want ~R22,500–R24,000 in retirement. But most South Africans retire with far less — National Treasury data suggests the average South African replaces only 30–40% of their pre-retirement income from formal retirement savings. The State Old Age Grant (R2,090/month, SASSA April 2026) acts as a floor for those who qualify. Remember to budget for medical expenses, which typically double in retirement.
What annual return should I assume for my retirement savings?
For a typical SA balanced fund (the default product in most pension and RA portfolios), a pre-retirement return of 9–11% nominal is reasonable based on historical JSE and global equity data. During retirement, most retirees gradually de-risk their portfolio to 60–70% income/bonds, 30–40% equity — so 6–8% post-retirement is appropriate. The calculator defaults to 10% pre-retirement and 7% post-retirement. Always subtract your fund's TER (typically 0.5–2.5%) from the gross return — use the Investment Fee Calculator to see how much that costs.
What if I'm already close to retirement with a big gap?
The options are: (1) increase contributions — even a few years of maximum contributions makes a meaningful dent; (2) delay retirement by a few years — every extra year adds contributions AND reduces the drawdown period; (3) reduce income target — R15,000/month instead of R25,000/month requires roughly 40% less capital; (4) accept a partial shortfall — the pot runs out earlier, but the State Old Age Grant and family support may cover later years. A qualified financial planner (CFP) can model all four options against your actual portfolio and tax situation.
How does inflation affect my retirement savings?
Inflation erodes purchasing power silently. R20,000/month today requires R32,578/month in 10 years at 5% inflation — to fund the same lifestyle. The calculator adjusts your target monthly income to future rands at retirement, then calculates the pot needed to fund that inflation-adjusted amount for your full retirement. This is why the target pot looks larger than a naive R20,000/month × 12 × 20 years calculation: you need enough to cover increasing income requirements over time, not a fixed nominal amount.
Can I include my State Old Age Grant in retirement planning?
Yes — the calculator has a toggle for this. The State Old Age Grant pays R2,090/month (SASSA, April 2026) and is available from age 60, subject to a means test (household income below ~R92,000/year). If you qualify, it reduces the income your savings need to generate. The calculator inflates the grant amount forward to retirement at the same inflation rate as your income target. Note: the grant is inflation-indexed by government most years, but this is not guaranteed — treat it as a potential supplement, not a core plan.
Should I include my pension fund AND my TFSA in current savings?
Yes — include the total value of all retirement-earmarked savings: pension fund, provident fund, retirement annuity (RA), preservation fund, and any TFSA or investment account you treat as retirement savings. Don't include your bond equity or emergency fund — those serve different purposes. For contributions, include total monthly going into all retirement vehicles: employer pension contributions count (your share and your employer's share if it flows through the same fund).
What is the two-thirds rule for SA pension withdrawals?
For pension and provident fund withdrawals at retirement, SARS applies a specific rule: you may take up to one-third of the retirement value as a lump sum (taxed on a sliding scale, with the first R550,000 currently tax-free). The remaining two-thirds must be used to purchase a living annuity or guaranteed annuity that pays monthly income. This mandatory-annuity rule is the main reason retirement planning focuses on the total pot value rather than just the lump sum — the annuity income is what actually funds your retirement.
Sources: State Old Age Grant amount from SASSA (April 2026). Return rate assumptions from published SA fund fact sheets (Allan Gray, Coronation, Ninety One — May 2026). Tax rates and pension fund rules from SARS and the Income Tax Act. The two-thirds annuity rule and Regulation 28 constraints are not modelled — consult a CFP for personalised advice. Not financial advice.
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