Early Withdrawal Cost Calculator
See how much of your pension, provident, preservation fund or retirement annuity you would actually receive if you cash it out when you resign, when you are retrenched, or when you retire, and what that cash could have been worth at retirement. Change any amount and every result updates instantly.
Your fund
Tax details
Future value
The cost of cashing out
Same balance, three different exits
| Resign | Retrenched | Retire |
|---|
What cashing out costs your retirement
If you preserve instead
Values in today's money (adjusted for inflation) unless marked as future rands. "Cash reinvested" assumes you invest the after-tax cash at the same growth rate, which flatters cashing out because returns outside a retirement fund are usually taxed.
| Age | Preserved (today's money) | Preserved (future rands) | Cash reinvested (today's money) | Retirement income / month |
|---|
Preserve vs cash out
Today's money. The gap between the lines is the growth you give up by paying tax now and leaving the tax-free fund.
Withdrawal rules by fund type
- Pension and provident funds: when you leave your job (resignation, dismissal or retrenchment) you may cash out your vested component and savings pot. Your retirement component (two-thirds of contributions since 1 September 2024) must be preserved until retirement.
- Preservation funds: you may make one full or partial withdrawal before retirement if you have not already done so. It is taxed as a withdrawal benefit.
- Retirement annuities: you cannot cash out an RA because you resign or are retrenched. Early access is only allowed if the vested value is under R15 000, if you are permanently disabled, or if you have stopped being a tax resident for three years.
- Retrenchment: a fund lump sum paid because you were retrenched is taxed on the retirement table (first R550 000 tax-free) instead of the withdrawal table. It applies when the employer closes down or reduces its workforce, and not if you held more than 5% of the employer's shares at any time.
- At retirement: pension funds, preservation funds and RAs (and provident fund savings after 1 March 2021) allow at most one-third as cash. The rest must buy a pension (annuity). If the total is R247 500 or less, you may take it all in cash. The Retire column shows the tax as if the full amount were taken in cash, so you can compare like with like.
- Savings pot: you may withdraw from R2 000, once per tax year, without leaving your job. Withdrawals are added to your income and taxed at your marginal rate.
Tax tables used
Withdrawal lump sums (resignation, dismissal, early withdrawal)
| Taxable lump sum (R) | Rate of tax |
|---|
Retirement, retrenchment & severance lump sums
| Taxable lump sum (R) | Rate of tax |
|---|
Lump sums are cumulative over your lifetime. Tax is worked out on all lump sums taken since October 2007 (withdrawals), March 2009 (retirement) and October 2011 (severance), less the tax that would apply to the earlier ones. Enter earlier amounts under "Lump sums taken before".
This calculator gives estimates based on SARS lump sum tax tables. It assumes the tax brackets rise with inflation, uses a steady growth rate, and does not include fund exit fees, outstanding housing loans, divorce orders or tax directive adjustments. Your fund will apply for a tax directive from SARS that sets the final tax. Please speak to a qualified financial adviser before you withdraw retirement savings.
How This Early Withdrawal Calculator Works
This calculator takes the same retirement fund balance and shows what you would receive if you leave the fund in three different ways: you resign, you are retrenched, or you retire. It then shows what cashing out could cost your retirement income, because the money you take today stops growing inside the fund.
You choose your type of fund and enter the amount you could cash out. You can also add your two-pot savings balance, your other taxable income for the year, lump sums you have taken before, any severance pay, your age, your retirement age, and the growth and inflation rates you want to test. Every result updates as you change a number.
Reading Your Results
- Cash if you resign, and the tax on that cash: what you would keep and what goes to SARS if you cash out when you leave your job.
- Same balance, three different exits: the cash you keep and the tax to SARS if you resign, are retrenched or retire.
- Worth at retirement, and the future cost of cashing out: what the money could be worth if it stays in the fund, compared with the after-tax cash if you take it now. The cost is shown in today’s money.
- Retirement income per month: the monthly income the preserved money could give you at the drawdown rate you choose.
- The chart compares three lines: preserved in the fund, after-tax cash reinvested, and cash taken today. The gap between the lines is the growth you give up by paying tax now.
Results in today’s money are adjusted for inflation, so they show what the amounts would buy now. Results in future rands are the larger numbers you would see at your retirement age.
Why the Way You Leave Changes the Tax
Withdrawals from a retirement fund are taxed in lump sum tables, and which table applies depends on how you leave. A resignation is taxed on the withdrawal table. Retirement, and a retrenchment that qualifies, are taxed on the more favourable retirement table.
For 2026/27, the withdrawal table is:
- R0 to R27,500: 0 percent
- R27,501 to R726,000: 18 percent of the amount above R27,500
- R726,001 to R1,089,000: R125,730 plus 27 percent above R726,000
- Above R1,089,000: R223,740 plus 36 percent above R1,089,000
The retirement table, which also applies to qualifying retrenchments, is:
- R0 to R550,000: 0 percent
- R550,001 to R770,000: 18 percent of the amount above R550,000
- R770,001 to R1,155,000: R39,600 plus 27 percent above R770,000
- Above R1,155,000: R143,550 plus 36 percent above R1,155,000
Both tables are cumulative. SARS works out the tax on all your lump sums to date, including the new one, and then subtracts the tax on your earlier lump sums using the same table. A lump sum you took years ago can therefore push the next one into a higher bracket. This is why the calculator asks for lump sums you have taken before and any severance pay. Our lump sum tax guide explains the method with examples.
A Worked Example
Take a vested balance of R400,000 with no earlier lump sums.
- Resign and cash out: the withdrawal table gives tax of R67,050 (18 percent of R372,500), so you keep R332,950.
- Be retrenched and cash out: the retirement table is 0 percent up to R550,000, so the tax is R0 and you keep R400,000. This applies only to a qualifying retrenchment, and the fund’s own rules decide what can be paid out.
- Retire: cash is usually limited to one third of the vested component, which is about R133,333. The rest must buy an annuity unless the small-balance rule applies. The cash falls inside the R550,000 tax-free band, so the tax is R0.
Now look at the long-term cost. Assume 9 percent growth, 5 percent inflation and 20 years until retirement. Left in the fund, the R400,000 grows to about R845,000 in today’s money. The R332,950 left after resigning, reinvested at the same growth, grows to about R703,000 in today’s money. That is a difference of about R142,000, and it assumes the cash earns the same return as the fund with no tax on it. These rates are examples, not forecasts, and the calculator’s own figures will depend on the inputs you enter.
Rules by Type of Fund
- Pension and provident funds: when you leave your employer, you can generally cash out the vested component and the savings component. The retirement component, which is two thirds of contributions since 1 September 2024, must stay preserved.
- Preservation funds: one full or partial withdrawal before retirement is allowed, if you have not made one before.
- Retirement annuities: you cannot cash out when you resign or are retrenched. Early access applies only in narrow cases, such as permanent disability or after three years of non-residence for tax purposes.
Our comparison of retirement fund types sets out the differences in more detail.
The Savings Pot Is Taxed Differently
Your two-pot savings component is not taxed on the lump sum tables. A withdrawal is added to your other taxable income and taxed at your marginal rate, between 18 and 45 percent for 2026/27. You can take one withdrawal per tax year, with a minimum of R2,000. To see the tax and net payout on a savings withdrawal, use our two-pot withdrawal calculator.
What Retrenchment Does and Does Not Change
A retrenchment that qualifies is taxed on the retirement table, so the first R550,000 of your lump sums is tax-free over your lifetime. Severance pay from your employer counts towards the same table. If you held more than 5 percent of the employer’s shares at any time, the severance rules do not apply to you. Read what to do with your fund after retrenchment in our retrenchment guide.
What This Calculator Does Not Include
- Fund exit fees and administration charges.
- Outstanding housing loans against the fund.
- Divorce orders.
- Adjustments made when SARS issues the tax directive.
The cash you reinvest is assumed to earn the same growth as the fund. This favours cashing out, because returns outside a retirement fund are usually taxed.
Frequently Asked Questions
How much tax do I pay if I resign and cash out my retirement fund?
A resignation is taxed on the withdrawal lump sum table. For 2026/27, the first R27,500 is tax-free and the next slice up to R726,000 is taxed at 18 percent. For example, a R400,000 withdrawal with no earlier lump sums attracts tax of R67,050.
Is a retrenchment taxed differently from a resignation?
Yes. A qualifying retrenchment is taxed on the retirement lump sum table, which is tax-free up to R550,000 for 2026/27. The same R400,000 that costs R67,050 in tax on resignation costs R0 on retrenchment, if you have taken no earlier lump sums.
Can I cash out my retirement annuity when I resign?
No. A retirement annuity cannot be cashed out when you resign or are retrenched. Early access applies only in narrow cases, such as permanent disability or if you cease to be a South African tax resident for three years.
How much cash can I take when I retire?
At retirement you can usually take up to one third of the vested component as cash, and the rest must buy an annuity. You can take everything as cash if the retirement component plus two thirds of the vested component does not exceed R240,000, which is R360,000 in total if all your money is vested. Money in the savings component can be taken in full.
What does cashing out cost my retirement?
You lose the tax paid now and the growth that money would have earned until you retire. The calculator shows this as the future cost of cashing out, in today’s money. The size of the cost depends on how many years remain, the growth rate and inflation.
Do earlier lump sums affect the tax on a new withdrawal?
Yes. Lump sum tax is cumulative, so earlier withdrawals, retirement lump sums and severance count towards the same table. Enter them in the calculator to see their effect on the new tax.
Is this calculator financial advice?
No. It gives estimates based on the figures you enter. Your fund applies for a SARS tax directive, which sets the final tax. To talk through your own position, request a portfolio review.
Last updated: October 2026. Tax year: 1 March 2026 to 28 February 2027.