RA or TFSA first? See the trade-off, not a verdict.
A retirement annuity is a deduction now and tax later. A tax-free savings account is no deduction now and no tax later. Which ends up bigger depends on you.
This tool projects both after tax, on assumptions you set. It does not tell you which to choose, because the honest answer turns on things only you know: your tax rate now versus at retirement, how long you have, and whether you need access to the money before 55. The result is yours to interpret, not a recommendation.
Everything is computed in your browser. Your numbers never leave this page.
How this is computed
Two honest ways to ask the same question
An RA and a TFSA are taxed at opposite ends. The RA gives you a deduction going in and taxes the money coming out. The TFSA does the reverse. Comparing them fairly depends on one choice: are you holding the cost to you constant, or the amount contributed constant? The two framings can point in different directions, which is the whole point.
Same cost to you
You fix what leaves your pocket after tax. Because the RA deduction refunds tax on the contribution, that same cost buys a larger RA contribution than a TFSA. This is where the deduction works hardest. It assumes you reinvest the benefit rather than spend the refund.
Same amount contributed
You fix the rand amount going in, and treat the RA tax refund as money you receive and spend. On this basis the RA loses its head start, and the tax-free withdrawal of the TFSA often carries it. It shows how much of the RA case rests on reinvesting the refund.
How each side is taxed
The RA contribution is deductible under section 11F, up to 27.5% of income and capped at R430,000 for the 2027 tax year. Growth inside the fund is untaxed. At retirement, up to one third can be taken as a lump sum, taxed on the retirement lump-sum table (the first R550,000 is at 0%). At least two thirds must buy an annuity, and that income is taxed at your marginal rate in retirement. This tool models the lump-sum third on the table and taxes the annuity two-thirds at the retirement rate you set. It is a simplification, and it is labelled as one.
The TFSA takes no deduction. Nothing inside it is taxed, and nothing is taxed on withdrawal. Its constraint is the ceiling: R46,000 a year and R500,000 over your lifetime, so a larger annual amount fills the lifetime room and then stops, while the RA keeps taking contributions.
Common questions
After reading this section, if you still have questions, feel free to contact us however you want.
So which one should I choose?
This tool will not answer that, and neither should any calculator. The choice depends on your tax rate now versus at retirement, your horizon, your need for access before 55, and your estate plans. Those are personal. Use the two framings to see the range, then take a directed recommendation from an FSP-licensed adviser who knows your full position.
Why does the RA look so far ahead on the "same cost" view?
Because the deduction lets you contribute more for the same out-of-pocket cost, and that larger base compounds tax-free for decades. That advantage is real only if you reinvest the benefit of the deduction. The "same amount contributed" view shows what happens if you do not.
What if my tax rate at retirement is higher than today?
Then the RA is taxed more heavily coming out than it saved going in, and the gap narrows or the TFSA moves ahead. Try it: raise the retirement rate above your current rate and watch the numbers cross.
Do my numbers leave my computer?
No. Every calculation runs in your browser. Nothing is uploaded, stored, or sent to a server — which also keeps it clean under POPIA.
Who built this
Rian Cronje comes to personal finance from the outside. After 25 years in corporate finance: Group Financial Controller roles, multi-currency consolidations and digital transformation, the unglamorous rigour of making a business’s accounts actually reconcile - he found almost none of that discipline had reached the way individuals track their own wealth. He is not an advisor; he has nothing to sell you about where to put your money. He built Monverdo to close that gap: to hold a person’s wealth to the standard a company holds its own books, and to break down the jargon that keeps capable people. him once included, locked out of their own numbers.
This calculator publishes a standard, simplified comparison of a retirement annuity and a tax-free savings account for the selected year of assessment, on assumptions you set. Projected growth and future tax rates are assumptions, not forecasts. It is general information and an educational tool, not tax or financial advice, and it does not recommend either product. The right structure for you depends on your circumstances. Consult an FSP-licensed financial adviser and a registered tax practitioner before acting. Methodology by Rian Cronje, 25 years senior international finance and Group Financial Controller experience. Monverdo is a wealth-tracking product in development. Join the waitlist to track both wrappers in one view.
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