TFSA vs RA vs Satrix - Calculator

[Neo_X]

still same link as before?

no link is updated on op for each new version (especially since its bug fixes

Currently busy adding 20 and 30 year calculations - but probably bit off more than i can chew. predicting tax in 39 years is kinda impossible. considering to keep it inflation adjusted, but we all know Zuma wont fall for that.

 

[MikyMouse]

no link is updated on op for each new version (especially since its bug fixes

Currently busy adding 20 and 30 year calculations - but probably bit off more than i can chew. predicting tax in 39 years is kinda impossible. considering to keep it inflation adjusted, but we all know Zuma wont fall for that.

thanks!

 

[Neo_X]

Update to version 2.0
* major changes in tax tables - applied 10% increase on tax tables per year (current average since 2005) - this is configurable under inputs...
* added 20 and 30 year results sets as well
* 10 year result is based on tax for a ten year "draw" (year 15 tax is applied)
* 20 year result is based on tax for a twenty year "draw" (year 30 tax is applied)
* 30 year result is based on tax for a thirty year draw (year 45 tax is applied)


becoming quite a complex little beast - hope excel keeps up

 

[Neo_X]

Update to version 3.0
Major functionality update - basically it is now a South African Financial Independence calculator. Most Inputs is customizable, including Age, Inflation, and current portfolio values. System will output 3 periods between your current age and 55 years, allowing you to see capital growth.


Can someone maybe recommend some financial /retirement draw down calculators out there? i would like to run simulations to compare values.

For now it looks quite accurate - Any comments is welcome.


Basic operation :

• income is invested as per inputs
• investment is stopped at the configured FI years
• draw-down is tested(eg first equity then TFSA(draw salary is current salary minus savings)
• once 55 is reached draw capital is combined with RA, and max salary is drawn to reach 95
• possible surplus salary at 55 is reported (after tax)

**Note1 If draw down pre 55 failed, salary will be shown as R0.00

 

[Neo_X]

Update to version 3.1
* Expanded draw down function - now select the most rewarding draw path (selecting between Equities/ TFSA and also splitting a third of the RA at 55 into equities or keeping it in tact)
* Added a option to block TFSA limits from increasing every year(configurable under constants)
* fixed some calculations fro extreme cases(eg paying RA and TFSA off in one month)

 

[gorillapower]

This is really cool! Good Job Neo_X! Its exactly what ive been trying to put together in excel for a couple of weeks now, nowhere near is comprehensive as yours.

I am having difficulty understanding some figures though, i wonder if you can help?

I have set up the sheet up with the following params:
http://imgur.com/tPGtA0u

And i get the follow results here.

http://imgur.com/9T2chBY

Im wondering why the TFSA Salary is zero?

Im not sure what the summary means. Does it mean that i have a yearly salary of R1 037 215.44 from equity until 55? Ditto with the RA (which I cant draw until 55)?

Im a bit confused...

 

[Neo_X]

This is really cool! Good Job Neo_X! Its exactly what ive been trying to put together in excel for a couple of weeks now, nowhere near is comprehensive as yours.

I am having difficulty understanding some figures though, i wonder if you can help?

I have set up the sheet up with the following params:

And i get the follow results here.

Im wondering why the TFSA Salary is zero?

Im not sure what the summary means. Does it mean that i have a yearly salary of R1 037 215.44 from equity until 55? Ditto with the RA (which I cant draw until 55)?

Im a bit confused...

Gorillapower, your screenshots is not showing on my side :/, so cant exactly see.

I have updated to version 3.2 , maybe try that.
*Tax tables was "ahead" with a year - Corrected
*Improved the Salary prediction required at Financial Independence - should now be much more accurate(current expenses is inflation adjusted with buffer added, then reverse tax is applied to determine the before tax salary)
*Added a Spending buffer which will be added to your salary after FI (use full if you want to go on that yearly travel trip


a zero TFSA salary means that the following could have happened
You start "retirement" at age 45 with a good sum in TFSA and Equities, as well as RA.
TFSA money is used up first(using current expenses as a salary added to the spending buffer), and it hits zero at age 53 - thus it is gone/kaput/will never grow again.

You then live on equities form 53 up to 55
at 55, your RA pays out.

Now you have for example 100k in Equities and 400k in RA.
using your configured growth rates, we can now determine exactly how much salary you can draw form the RA and equity capital amounts in order to have it last 40 years into retirement.

this salary is then totaled, tax is deducted where needed.
the system then also calculates what salary you would have needed at 55 (sticking to your current spending habbit)

the two amounts is then deducted from each other ( Salary possible minus salary required), which gives a surplus salary (@55 years old)

to make it easier to understand, i then reverse inflation on this amount, which shows the surplus salary in a cash amount in "today" value - this is shown on the summary.

 

[Neo_X]

Update to version 3.3
*discovered and fixed a major miscalculation with regards to savings (was previously matching salary increases, while it should be based on salary minus inflation adjusted expenses.
Bonus part is that this increases savings, and thus will result in a quicker FI.
*added more accurate descriptions on the summary page
*added a check to show a salary shortfall (eg your increases is below inflation, which then results in running into a salary that cant carry your expenses.

 

[Neo_X]

Update to version 3.4
*Adjusted internal calculations ,based on paying current loans (eg home /car) - expenses that wont remain into financial independence for long - configurable(change to zero if you plan to keep paying off your home/car up to 95 )
*improved the results screen ,showing more details as to what is happening, including your salary at FI.

only challenges that still remains :
* Drawing a salary after FI is calculated, mostly, based on drawing your tax every month. this wont be the case, as you will draw a once off SARS amount after tax claims are due. (thus additional savings will happen especially if you pay large tax amounts, since your tax owed will grow during the year in your portfolio)

* Homeloan and car expenses is removed after the payment period is complete - not sure how to tackle the scenario where you want to continue wasting money into the latest and fastest clown-mobiles every few years. for now, please configure the buffer to allow for any expenses that you will keep/add after FI.

 

[Neo_X]

This is really cool! Good Job Neo_X! Its exactly what ive been trying to put together in excel for a couple of weeks now, nowhere near is comprehensive as yours.

I am having difficulty understanding some figures though, i wonder if you can help?

I have set up the sheet up with the following params:
http://imgur.com/tPGtA0u

And i get the follow results here.

http://imgur.com/9T2chBY

Im wondering why the TFSA Salary is zero?

Im not sure what the summary means. Does it mean that i have a yearly salary of R1 037 215.44 from equity until 55? Ditto with the RA (which I cant draw until 55)?

Im a bit confused...

yup - at least you managed to convince me that some more details is needed on the summary screen

the salaries shown is for after 55 only - eg in your results 1 Mil from Equities and 1.7Mil from your RA.
your TFSA gained value until age 42, and was then used to carry you up to 55(assuming that your expenses remained the same and didn't increase). I think in this case part of your equities was used as well once the TFSA ran out, which is why the TFSA is zero after 55.

Hope i explained it correctly now

 

[Neo_X]

Update to version 3.5
* Added a once off bonus at FI - configurable. This is to allow a lumpsum draw to happen at FI, mostly for big expenses (paying off house/car, etc)
* Fixed tax tables between FI age and 55- changed to CGT tax(was previously normal tax)
* Improved readability on summary screen

 

[Neo_X]

Update to version 3.6 (7/7/2015)
* fixed a bug that slipped in when moving some of the reference tables around (affected TFSA contributions)
* adjusted tax table inflation averages a little.


Can someone maybe recommend a source or two of "real" inflation? i know it is a highly contested topic, but i will rather have the calculator default to a more safe value if needed.
the current 6% as reported does not seem to be enough

in any event, you can edit the inflation on the inputs/constants (make it a % or two higher), as per your own feeling. planning for a higher inflation will help with generating a sufficient investment buffer/surplus as well.

 

[Neo_X]

Update to version 3.7(19/11/2015)
* improved a formula to be more accurate for monthly interest(This was workbook wide, thus affects all totals)

 

[Neo_X]

Update to version 3.8(03/12/2015)
* Improved summary page after some recommendations (added portfolio values at the FI year, so that you can have a visual of the values)
* Added a field to allow changing to the new RA tax benefit limit - soon to be implemented in 2016 ( thank you SuperSunbird)

 

[supersunbird]

Will the new up to 27.5% claimable tax benefit change your calculations?

 

[Neo_X]

Will the new up to 27.5% claimable tax benefit change your calculations?

it will probably - but i don't think it is active yet?

it is somewhere on my todo list to prepare for it - but i wanted to see the final rules/law before changing the calculator from the current 15%.

 

[supersunbird]

it will probably - but i don't think it is active yet?

it is somewhere on my todo list to prepare for it - but i wanted to see the final rules/law before changing the calculator from the current 15%.

It's being implemented from 1st March next year.

 

[Neo_X]

It's being implemented from 1st March next year.

ok i managed to add a editable field to allow you to customize the tax benefit value. also note that you can customize how much exactly you want to put into an RA ( ie more than the tax regulated value, or less). I have verified - tax returns is handled/limited correctly.

Limit RA contrib cap to (%) 15 - Changing this will limit your RA contributions
SARS RA tax benefit limit (%) 15 - Changing this will affect the tax return calculations (only modify if SARS updates this)

 

[Neo_X]

Update to version 4.0(6/12/2015)
* Added functionality to add retirement annuity deduction as per payslip. (caution - this is kept constant throughout the calculator and adjusted as per your pay increases. Any other contributions towards an RA will be after tax, and tax returns will be re-invested).
Although some checks is in place, please double check that your RA deduction is not greater than the allowed SARS Tax benefit.
/* this is quite a major update - if anything strange is noted on the results, please provide feedback

* Summary screen was updated -with a total Portfolio value, and some readability/formatting.

 

[whatwhat]

This is fantastic, thank you.