South Africa RA Calculator
Project your retirement annuity or pension pot at retirement. See the tax saved at your marginal rate versus contribution over time.
Details
Result
RA Pot at Retirement
R9,703,688
Total Contributions
R1,750,000
Investment Growth
R7,953,688
Annual Tax Saved
R21,600
Tax Saved Over Period
R540,000
Years of Compounding
25
Retirement annuities: the tax arbitrage
A Retirement Annuity (RA) is the single biggest legal tax deduction available to most South Africans. Contributions up to 27.5% of taxable income or R350,000 per year are deductible. At the 36-45% marginal brackets, every R1,000 you contribute gets R360-R450 back from SARS within months (via tax return) — an effective instant 36-45% return on Day 1.
Regulation 28 limits
Retirement funds in SA must comply with Regulation 28: max 75% equities, 45% offshore (raised from 30% in 2022), 25% property. These are prudential caps, not optimal allocation — most 20-40 year-olds would want 80%+ equity and 50%+ offshore but Reg 28 caps the tax-wrapped portion. Top up offshore exposure inside your TFSA or discretionary portfolio.
RA providers & fees
Annual fees compound brutally. A 1% difference over 30 years costs ~25% of your final pot. Low-cost options: Sygnia Skeleton 70 (~0.4% TER), 10X High Equity (~0.8%), Satrix Balanced Index (~0.5%). Higher-cost actively managed: Allan Gray, Coronation, Foord (~1.3-1.7%). Use EasyEquities RA, 10X, Sygnia for DIY setups — no intermediary commission.
Access & payout rules
Minimum access age 55. At retirement: up to 1/3 as lump sum (first R550k tax-free, then sliding scale 18-36%), remainder must buy a living annuity (market-linked, 2.5-17.5% drawdown) or a guaranteed life annuity (insurer-underwritten, pays till death). Cannot withdraw before 55 except on emigration (tax residency ceased 3+ years) or permanent disability.
Frequently Asked Questions
Everything you need to know, in one place.
RA vs pension fund vs provident fund?
Pension and provident funds are employer-linked (automatic payroll deduction). Retirement annuities (RAs) are individual — you can contribute regardless of employer. All three fall under the same 27.5% / R350k deduction cap combined and harmonised benefits since 2021: at retirement, up to R550k tax-free lump sum, rest into a living or life annuity.
Best low-cost RAs in SA?
Sygnia Skeleton 70 (~0.4% TER), 10X High Equity (~0.8% TER), Allan Gray Balanced (~1.3% TER), Satrix Balanced Index (~0.5% TER). Fees compound massively — a 1% fee difference over 30 years can cost 25%+ of your final pot.
Reg 28 — what does it restrict?
Regulation 28 caps retirement funds at 75% equities, 45% offshore, 25% property. Introduced for prudence. Since 2022, the offshore cap is 45% (up from 30%). Outside retirement wrappers (TFSA, discretionary), no Reg 28 restrictions.
When and how can I access my RA?
Age 55 minimum for retirement. At retirement, up to 1/3 as lump sum (first R550k tax-free, then sliding scale up to 36%), rest must buy a living annuity or life annuity. Cannot withdraw before 55 except on emigration (tax residency ceased for 3+ years) or permanent disability.
How does the two-pot retirement system work?
Effective 1 September 2024, all new retirement contributions split into two pots: Savings Component (1/3 of contributions) — accessible once per tax year before retirement, minimum R2,000 withdrawal, taxed at your marginal rate. Retirement Component (2/3) — strictly locked until age 55. Existing pre-Sep-2024 balances sit in a Vested Component (old rules apply). Goal: balance flexibility in emergencies with long-term preservation. Withdrawing from Savings Pot is costly — treat it as last resort.
Living annuity vs life annuity at retirement?
Living annuity: keeps capital invested, you draw between 2.5%-17.5% per year. Full flexibility, capital passes to heirs, but risk of depletion. Life annuity: insurer pays fixed (or inflation-linked) income for life. No capital risk but no residue for heirs. Popular hybrid: use 2/3 of pot in a living annuity for flexibility, 1/3 in a life annuity (within living annuity via guaranteed income portfolios) for base security. Review drawdown annually against performance and inflation.
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