South Africa Investment Return Calculator

Frequently asked questions

What return should I assume for a South African investment?

Long-run JSE equity returns have averaged high single digits to low double digits before fees and inflation, but past performance is not a guarantee. Use a conservative net figure, subtract fees, and compare against inflation. This calculator deducts your fee percentage from the gross return so you project a realistic net outcome.

How much does a 1% fee difference actually cost over 20 years?

On a R500,000 portfolio growing at 10% gross over 20 years, a 1% fee versus a 2% fee costs roughly R400,000 to R600,000 in lost final value, because the fee compounds against you every year. This is why low-cost index ETFs, which often carry fees below 0.5%, can materially outperform an actively managed fund with a 1.5% or higher total expense ratio, even if the gross returns are similar.

Should I use a nominal or real return in this calculator?

That depends on whether your expense target is in today's rands or future rands. If you use a nominal return, say 11%, the projected value is in future rands and you need to deflate it by inflation to understand its purchasing power. If you use a real return, say 4% to 5% after subtracting expected inflation of around 6%, the result represents what the portfolio is worth in today's money. Using a real return is usually cleaner for retirement planning because it keeps comparisons honest.

What is the annual contribution limit for a South African tax-free savings account?

The annual contribution limit for a tax-free savings account in South Africa is R36,000 per tax year, with a lifetime cap of R500,000. Growth, dividends, and interest inside the account are completely free of tax, including dividends withholding tax and capital gains tax. Exceeding the annual or lifetime limit triggers a 40% penalty tax on the excess, so it is important to track contributions across all providers.