Most tools that touch the two-pot savings component just tell you the payout after tax. That is only half the picture, so I built a calculator that shows both halves.
Put in what you want to withdraw and your other income for the year, and it shows what actually lands in your account after tax and your fund’s admin fee. A savings withdrawal is taxed as ordinary income at your marginal rate, there is no R550,000 tax free threshold like a real retirement lump sum gets, so the tax bite is bigger than people expect.
Then it shows the other side. The full amount leaves your retirement pot, not just the after tax portion, so it compounds it forward to your retirement age in today’s rands and shows what that withdrawal actually costs you by then. There is also a toggle to model withdrawing the same amount every year until retirement, since that turned out to be the norm rather than the exception, and the total is a bigger number than most people expect.
That compounding view is what people need to see, because most of us only think about the tax bite and walk away feeling okay about it. Spoke to two colleagues at work last year who both withdrew and neither of them had thought past “what lands in my account.” The repeating withdrawal toggle is the part that will make some people uncomfortable, which is exactly why it is worth sitting with. Did you model the admin fee as a percentage or a flat rand figure, because some funds charge quite differently?
The compounding cost is the number people skip because it feels abstract right now, but this calculator makes it concrete and that is where it earns its keep. No R550k threshold, taxed at your marginal rate, and then whatever your fund charges on top, people genuinely do not expect the gap between what they claim and what actually arrives. Two thirds back for more says everything about how this plays out in practice. Run the repeat withdrawal model before you touch it a second time.
The annual withdrawal toggle is the part that actually hurts to look at. People see R6k or R9k landing in their account and think they’ve come out ahead, but run that same withdrawal out 20 or 25 years at even modest real growth and the retirement shortfall becomes genuinely uncomfortable. The marginal rate thing catches a lot of people off guard too, especially anyone sitting just below a bracket who tips themselves over it with the withdrawal and ends up paying more tax on their other income as well.
Two in three coming back for more tells you everything about why the two-pot system got created in the first place, people are broke by month three, not by retirement. What worries me is that toggle you mention, most people withdrawing every single year until they retire are going to hit sixty five with basically nothing, and then it becomes a state pension problem down the line. Good that the tool shows the real cost instead of just the payout, that’s the number nobody wants to look at.