SARS levies a 40% penalty tax on any contributions exceeding the annual TFSA limit (Section 12T, Income Tax Act). Reduce your monthly contribution to R3,833 to stay within the R46,000 annual limit and avoid this penalty.
RA funds are locked until age 55. Two-thirds of the fund must be used to purchase an annuity at retirement. Consult a financial advisor for suitability.
Every formula used in this calculator is based on established financial mathematics and official South African tax legislation. The sources below allow you to independently verify each calculation.
Where P = initial capital, r = annual rate (decimal), n = months, PMT = monthly contribution. When r = 0, the formula simplifies to FV = P + PMT × n (no division by zero).
Algebraic rearrangements of the FV formula. The annual rate solver has no closed-form solution and uses bisection search (120 iterations, converges to 10⁻¹⁰ precision) — a standard numerical method for root finding.
Converts a future nominal rand amount into today's purchasing power by deflating at the assumed inflation rate. South Africa's long-run CPI average is approximately 5–6% per annum (SARB data).
SARS taxes only a portion of your capital gain (the "inclusion amount"). For individuals the inclusion rate is 40%. At the top marginal rate of 45% this gives a maximum effective CGT rate of 18%. A R40,000 annual exclusion also applies per person (not modelled here as it requires an annual realisation schedule).
A flat 20% tax withheld at source on dividends paid by SA-resident companies to individual shareholders (effective 22 February 2017). Governed by Section 64E of the Income Tax Act No. 58 of 1962.
Standard present-value annuity formula in reverse — models a capital balance that earns compound interest while making regular withdrawals. Depletion occurs when expenditure exceeds monthly income from capital.