See your tax-free lump sum, what tax you'll owe, your estimated monthly annuity income — and exactly how much you need to maximise the R550,000 tax-free allowance.
Enter your details below. All calculations update automatically.
Everything your financial advisor charges to explain — in plain English.
For RAs and pension funds, you can only take a maximum of 1/3 as a cash lump sum. The remaining 2/3 must buy an annuity that pays monthly income.
The first R550,000 of your retirement lump sum is tax-free (2026). Above that: 18%, 27%, 36% in brackets. This is a lifetime allowance, not per withdrawal.
Prior withdrawals eat into your R550k — including two-pot, resignation payouts, and retrenchment benefits. SARS tracks this across your whole working life.
Provident fund balances accumulated before March 2021 are vested — you can take up to 100% as a lump sum. Only new contributions follow the 1/3 rule.
SARS allows 2.5%–17.5% annual drawdown. A sustainable rate is 4–5%. Drawing more than 6–7% risks depleting funds before you die.
To take the full R550,000 tax-free, your RA/pension fund needs to be at least R1,650,000 (since R550k is exactly 1/3 of R1.65M).
| Lump Sum Amount | Rate | Tax Payable |
|---|---|---|
| R0 – R550,000 | 0% | Tax-free |
| R550,001 – R770,000 | 18% | Max R39,600 |
| R770,001 – R1,155,000 | 27% | Max R103,950 + R39,600 |
| R1,155,001+ | 36% | R143,550 + 36% on balance |
Yes. Taking a smaller lump sum leaves more in your annuity, which increases your monthly income. The calculator shows this trade-off — adjust the lump sum percentage to see how your monthly income changes.
Yes — and this can be a smart choice if you need maximum monthly income and have other accessible savings for emergencies. The full fund goes into an annuity and generates more monthly income.
If you've already withdrawn R550,000 or more from retirement funds over your lifetime (resignations, retrenchments, two-pot), your entire retirement lump sum will be taxed. The first bracket is 18%, then 27%, then 36%. SARS tracks this via IRP5 records.
Yes — living annuity income is taxed as regular income using SARS's marginal rate table. However, most retirees fall into the 0% or 18% bracket because they have no salary income. The primary rebate (R17,235) also reduces their tax bill significantly.