The short answer
A widely used starting point is 25 times the yearly income you want in retirement, which assumes you draw 4% a year. For someone wanting R22 500 a month in today's money, that is about R6.75 million.
Starting from R300 000 at age 35, reaching that by 65 takes roughly R8 400 a month in today's rand (employer contributions count), rising with inflation each year.
The four numbers that decide it
| Number | What it is | Our example |
|---|---|---|
| 1. Target income | What you want to live on each month, in today's money | R22 500 a month |
| 2. Drawdown rate | The share of your savings you take as income each year | 4% |
| 3. Years to go | Time until you stop working | 30 years (35 to 65) |
| 4. Real return | Growth above inflation, after fees | 4% a year |
Working in today's money - real returns, after inflation - is the trick that makes the answer usable. "R6.75 million" in 30 years' time sounds like a lot and means little. "R6.75 million of today's buying power" is something you can picture.
Step 1: Decide what income you need
Most planners start with 70% to 75% of your pre-retirement salary. You stop saving for retirement, stop paying work costs, and ideally have paid off your home - but medical costs rise, and most South Africans need to fund their own medical aid in retirement.
If you will have other income in retirement - rent from a property, a spouse's pension, part-time work - subtract it here. Do not count on the state older persons grant: it is means-tested, and anyone with meaningful savings is unlikely to qualify.
Step 2: Choose a sustainable drawdown rate
Most South Africans retire into a living annuity, where you choose to draw between 2.5% and 17.5% of your capital each year. The law allows 17.5%. Your savings will not survive it.
| Drawdown rate | Capital needed per R1 of yearly income | How it tends to hold up |
|---|---|---|
| 3.5% | 28.6 times | Very cautious - suits early retirement or a long life expectancy |
| 4% | 25 times | The common starting rule |
| 5% | 20 times | Workable for many, with less margin for poor markets |
| 7.5% and up | 13 times or less | Industry modelling shows a material risk of running out over a long retirement |
The drawdown rate is the number you control most directly in retirement, and it matters more than almost anything else. Research by South African asset managers has repeatedly found that many retirees draw well above sustainable levels, often because they retired with too little and had no choice.
Step 3: Calculate the capital you need
That is 18.75 times this person's current yearly salary of R360 000.
Use this table to find your own number:
| Monthly income wanted (today's rand) | At 3.5% drawdown | At 4% drawdown | At 5% drawdown |
|---|---|---|---|
| R15 000 | R5.14 million | R4.50 million | R3.60 million |
| R22 500 | R7.71 million | R6.75 million | R5.40 million |
| R25 000 | R8.57 million | R7.50 million | R6.00 million |
| R40 000 | R13.71 million | R12.00 million | R9.60 million |
| R60 000 | R20.57 million | R18.00 million | R14.40 million |
Step 4: Count what you already have
Add up your pension or provident fund, any retirement annuities and preservation funds, and any other investments you are genuinely keeping for retirement. Then grow that total forward at your real return.
Step 5: Work out the monthly saving
Filling a R5.78 million gap over 30 years, at 4% above inflation, takes:
About 28% of a R30 000 salary - including what your employer contributes. Because it is in today's money, the rand amount rises with inflation each year, as your salary should.
That number surprises people, and it should not be read as a verdict. It shows why starting age matters so much. Here is the same R6.75 million target from a standing start, at different ages:
| Start saving at | Years to 65 | Monthly saving needed (today's rand, from zero) |
|---|---|---|
| 25 | 40 | R5 814 |
| 35 | 30 | R9 850 |
| 45 | 20 | R18 552 |
| 55 | 10 | R46 014 |
Starting ten years earlier does not save a little. It roughly halves the monthly cost. If you are starting later, our guide on whether it is too late to start investing covers what actually helps.
Five levers if the number looks too big
Each lever below is applied to our worked example on its own (35 years old, R300 000 saved, base case R8 430 a month):
| Change | New monthly saving | Saving vs base case |
|---|---|---|
| Retire at 67 instead of 65 | R7 437 | R993 a month less |
| Accept a 4.5% drawdown (need R6.0 million) | R7 336 | R1 094 a month less |
| Target 65% of salary, not 75% (need R5.85 million) | R7 117 | R1 313 a month less |
| Retire debt-free, so you need less income | Often the biggest lever of all - a paid-off home can remove a third of expenses | |
| Cut fees by 1% a year | In our example, about 20% more at 65 - roughly R1.1 million of today's money | |
Combine two or three and the gap shrinks quickly. The total investment charge on your retirement products is worth checking - it is the lever you can pull today, in ten minutes.
Don't forget tax - it is smaller than you think
Living annuity income is taxed as ordinary income, but retirees get extra rebates. On the 2026/27 tables, a 65-year-old drawing R270 000 a year pays roughly R23 000 in income tax - about 8.5% - after the primary and secondary rebates. Build that into your target, but do not overestimate it.
Two more tax facts that help:
- The lump sum. At retirement you can usually take up to a third of your retirement savings in cash, and the first R550 000 of retirement lump sums over your lifetime is tax-free.
- Contributions now are deductible. Retirement fund contributions are tax-deductible up to 27.5% of income, capped at R430 000 a year from 2026/27. For someone in the 31% bracket, R8 430 a month really costs about R5 800 after the tax saving.
And protect what you build: every early two-pot savings withdrawal comes straight off the numbers above.
Your ten-minute retirement number
- Monthly income wanted × 12 = yearly target
- Yearly target × 25 = capital needed (at 4% drawdown)
- Minus what you have, grown forward = the gap
- Recheck it every year - salary, savings and markets all move
Frequently asked questions
How much money do I need to retire comfortably in South Africa?
A common rule of thumb is 25 times the yearly income you want in retirement, based on drawing 4% a year. For R22 500 a month in today's money that is about R6.75 million; for R40 000 a month it is about R12 million. Your own number depends on your expenses, other income and how long your retirement lasts.
What is a safe drawdown rate for a living annuity?
Living annuities allow drawdowns between 2.5% and 17.5% a year. Many planners treat about 4% to 5% as a sustainable starting point. Industry modelling shows that drawing 7.5% or more carries a material risk of running out of money over a long retirement.
Is R1 million enough to retire in South Africa?
At a 4% drawdown, R1 million supports about R40 000 a year, or roughly R3 300 a month, in today's money. For most people that is not enough on its own, though it can supplement other income such as a spouse's pension or rental income.
How much should I save each month for retirement?
Many planners suggest 15% of your gross salary from your mid-20s, including employer contributions. Starting later needs more: someone starting from zero at 35 needs to save roughly 70% more each month than someone who started at 25 to reach the same target.
How is retirement income taxed in South Africa?
Income from a living annuity is taxed as ordinary income, but people over 65 get additional rebates, so the effective rate is often low. Lump sums taken at retirement are taxed on separate tables, where the first R550 000 over your lifetime is tax-free.
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Launch EZvest - it's free to start ->Educational content only. This article is general information, not financial advice, and no platform, product or provider is endorsed or recommended. Tax figures are for the 2026/27 South African tax year and are set by SARS and National Treasury, which change them regularly - confirm current figures before relying on them. Nothing here is a recommendation to buy or sell any security. Consult a licensed financial professional before making decisions. How we research and review these guides.