Retirement planner

• This is a model, not a prediction.
• The results from this calculator are based on the limited information that you have provided and assumptions made about the future. The amounts projected are estimates only and are not guaranteed.
• This calculator cannot predict your final superannuation benefit or level of retirement income with certainty because this will depend on your personal circumstances, unexpected life events, the Age Pension paid, investment earnings, tax and inflation.
• This calculator assumes that your contributions are steady and predictable and that all assumptions remain steady. These assumptions are essential so the calculator can show the effect of things you may be able to control, such as choosing a different investment option.
• Consider updating the projections provided by this model regularly, particularly if your circumstances have changed.
• Some of the assumptions can be changed to reflect your personal circumstances.
• Do not rely solely on this calculator to make decisions about your retirement. There may be other factors to take into account. Consider your own needs, financial situation and investment objectives. You may wish to contact the Financial Information Service or get advice from a licensed financial adviser.

• As of 17 April 2020, these calculators will use a single set of assumptions.
  The default assumptions in this calculator are based on Treasury’s long-term retirement income models. For more information on Treasury’s long-term retirement income modelling assumptions see the 2019 Treasury Research Institute paper ‘Accumulation of superannuation across a lifetime’.

For accumulation funds only

• The calculator works for accumulation funds only. It will not work for defined benefit funds.
• We assume your account balance will receive all income and outgoings mid-year, apart from Government co-contributions which we assume are received at the end of the year.

Results are in today's dollars

• Results are shown in today's dollars, which means they are adjusted for future increases in cost of living by deflating projected values back to today’s dollar value using the Wage Inflation assumption for the period up to retirement and the CPI inflation assumption for the period in retirement.

Inflation assumptions

• We make the following default assumptions about CPI inflation and Wage Inflation (which you can change under the Advanced Settings - Other section of the calculator):
  • CPI inflation of 2.5% each year; and
  • Wage Inflation of 4.0% each year
  • CPI inflation is used to inflate the following legislative factors throughout the projection:
    • Your income in retirement
    • Age Pension assets means testing threshold
    • Age Pension income means testing threshold
    • Deemed income asset thresholds
    • Transfer balance cap (increases only applied in $100,000 increments)
    • Today’s dollar value adjustment for the period in retirement
  • Average Wage Inflation is used to inflate the following legislative and other factors throughout the projection:
    
    • $ per annum Administration Fees and Advisor Fees
    • Age Pension payment rate
    • Concessional contribution caps (increases only applied in $2,500 increments)
    • Non-concessional contribution caps (increases only applied in $10,000 increments)
    • Government co-Contribution salary thresholds
    • Today’s dollar value adjustment for the period up to retirement

Self-employed?

To use the calculator:

• Change the employer contributions to 0%
• Enter all your contributions as additional voluntary contributions

Contributions

• We assume that your employer contributes an amount equal to 11% of your ordinary time earnings. You can change this if your employer contributes more than the minimum.
• For future years we assume that:
  • Your employer and voluntary contributions will increase with Wage Inflation
  • You will satisfy the Work test at older ages and so are able to contribute
  • From 1 July 2023, the SG rate used for the default employer contribution rate is 11%. The SG rate is assumed to increase by 0.5% per annum until the SG rate reaches and stays at 12% from 1 July 2025 onwards.

Before tax (salary sacrifice) contributions

• We adjust these contributions so you don't exceed the concessional contributions cap (which applies to the total of your employer and before tax contributions)
• At 1 July 2023, the concessional contribution cap is reset to $27,500 for all individuals.
• We assume that the concessional contribution cap will increase in future years with Wage Inflation once the $2,500 increment amounts are reached

After tax contributions

• We adjust these contributions so you don't exceed the annual non-concessional contributions cap.
• We do not allow for a higher cap that can apply over three consecutive tax years in some circumstances because the calculator can only make estimates based on regular contributions each year.
• The non-concessional contribution cap is set at 4 times the concessional cap and so will increase at the same time in future years.
• Should your projected total superannuation balance exceed the projected Transfer Balance Cap (see below) at any year in the projection, your projected non-concessional contributions will be restricted to zero for that year.

Government contributions

• We assume that you qualify for the Government co-contributions if you are under age 71 and you make after tax contributions
• The total income used to determine if you qualify for any co-contributions is equal to your annual salary before tax and any salary sacrificed super contributions
• The projection allows for the Government low income superannuation tax offset benefits. Your eligibility for this payment is based on your annual income, employer contributions and salary sacrifice contributions.

Transfer Balance Cap

• The Transfer Balance Cap is the cap on the amount of superannuation eligible to be transferred to account based pensions in retirement. This Transfer Balance Cap was $1,900,000 at 1 July 2023 and is indexed with CPI inflation over time and increases in increments of $100,000.
• As balances at retirement in excess of the projected Transfer Balance Cap are assumed to remain in a superannuation account similar to the one you held up to retirement, the same fees and returns applied prior to retirement are applied to this superannuation account (if applicable) in retirement.

Estimated age pension

• The calculator assumes the maximum amount of the Age Pension paid by Services Australia, as calculated in accordance with age pension rules as at March 2023, will increase with Wage Inflation.
• It is assumed you are eligible for the Age Pension if you qualify under the assets test and income test applied by the Services Australia. You can choose to leave out the Age Pension from the projection results by selecting 'No' to the 'Include Age Pension?' question in 'Advanced settings - other'.
• If you include your partner's details in the projection, the calculator assesses your Age Pension eligibility as a couple. If you have a partner but do not include them in your retirement projection, the calculator will assess you as a single person for Age Pension purposes and this will give incorrect results.
• If you include your partner, the calculator will only show the Age Pension from when you are both retired. If only one of you has retired, you may still be eligible for some Age Pension but the calculator does not show this.
• The calculator does not take into account your income needs before both members of a couple are retired. This could mean that your retirement income is overstated. You should talk to Centrelink to find out how much Age Pension you may be eligible for.
• The calculator assumes you will use any accumulated superannuation savings at retirement to purchase an account-based pension.
• In applying the income test to estimate how much Age Pension you will receive, the calculator allows for income on your investments including super based on income deeming rules. As some of your investments may not be subject to these income deeming rules, the actual treatment of any such investments may differ from that adopted by the calculator and this could affect the Age Pension you will receive.
• No allowance is made for any lump-sum commutations of an account-based pension.
• The calculator allows for the thresholds in the assets and income tests to increase in line with CPI inflation.
• The calculator assumes your personal assets and investments outside super increase in line with inflation including the expected rise in living standards in future years.
• By default, the calculator assumes you have $25,000 of personal assets (car, furniture etc.) at resale value and you have no investments outside super. You should adjust these default amounts if they do not reflect your circumstances.

Drawdowns in Retirement

• In addition to any Age Pension, it is assumed you (and your spouse where applicable) have retired on or after the relevant preservation age and have converted any superannuation savings up to the Transfer Balance Cap to an account-based pension product.
• Any projected superannuation balances above the Transfer Balance Cap at the time of your retirement are assumed to remain in the superannuation account you held prior to retirement which is subject to taxed investment earnings.
• The calculator determines the drawdowns from each account required to achieve a steady income in retirement. In the event you are projected to have both an account based pension account and a superannuation account in retirement, the calculator assumes that you drawdown your superannuation account before your account based pension account (subject to minimum drawdown requirements).
• The calculator applies the minimum drawdown rules annually to your drawdowns from your account based pension each year which may result in a higher income being paid to you in some years.

Retirement income

• The calculator determines the retirement income such that your superannuation account and account-based pension account will last until the 1 July after you reach the age your super is set to run out.  You can select the age you want your super to run out in 'Advanced settings - Other'.
• The age pension (where applicable) will continue to be paid for the remainder of the recipient's life.
• Only your retirement income from your and your partner's (if applicable) superannuation account (if applicable) and account-based pension and the government Age Pension is included in projected results. Income from any other investments is not included.

Results are shown at 1 July

• Your projected total super balance is shown at 1 July after you reach the age indicated on the chart.
• Your projected income results are shown for the financial year beginning on 1 July after you reach the age indicated on the chart. For example the super balance shown for age 65 is the balance at 1 July after your 65th birthday. 
• The projection assumes that you and your partner (if applicable) will retire on the 1 July after reaching the selected retirement age.

Include your partner

• Including your partner (if any) will allow a more accurate estimate of your Age Pension entitlement as a couple. If you do not include your partner the projection of your Age Pension entitlements will not be accurate.
• The calculator only allows for an age difference between you and your partner of 10 years or less.
• The calculator does not take into account your income needs before both members of a couple are retired. This could mean that your retirement income is overstated.
• Results are shown based on when the younger partner retires.

Investment return

We make the following default assumptions for investment return and earnings tax:

• Pre-retirement Investment return before investment fees and
  earnings tax of 7.5% each year
• Post-retirement investment return before investment fees of
  6.5% each year
• An effective tax rate on pre-retirement investment earnings of 7.0%.

Actual returns will vary significantly from year to year and could be negative in some years, particularly for investment mixes where more is invested in shares and property. This calculator does not allow for such variations. You can vary assumptions in 'Advanced settings'.

There is a lot to consider when comparing investment options between funds. Risk and return objectives and asset allocation within investment options may differ between funds and should be taken into account when comparing funds.

Tax

• We assume that you have provided your Tax File Number to your superannuation fund.
• 15% tax is deducted from your employer contributions and before tax (salary sacrifice) contributions. We use the earnings tax assumptions above to allow for the tax on the investment earnings of your superannuation fund prior to retirement and for balances held in a superannuation account in retirement as a result of exceeding the Transfer Balance Cap at the point of your retirement.
• As we automatically cap your contributions, tax on excess concessional or non-concessional contributions is not relevant. No allowance is made for any other tax. In particular, if you receive a benefit amount before age 60 no allowance is made for any income tax payable.

Administration fees

• We assume that dollar per annum administration fees will be charged mid-year on average and will increase with Wage Inflation each year and that the administration fees charged as a % of your balance are charged mid-year on average.
• We assume that these fees are tax deductible within super.

• We make a default assumption for administration fees of $74 per annum in today’s dollars.

Contribution fees

• We assume that contribution fees are deducted from your contributions as they as paid into superannuation.
• We assume that these fees are tax deductible within super.
• We make a default assumption of 0% contribution fees.

Investment fees

• These fees represent costs relating to the management of your investments and are directly deducted from your account.
• We assume that the investment fees charged as a % of your balance are charged mid-year on average.
• We assume that these fees are tax deductible within super.
• We make a default investment fee assumption of 0.85%.

Indirect cost ratio / indirect costs

• We assume that the indirect costs are charged as a % of your balance are charged mid-year on average.
• We assume that these fees are tax deductible within super and that tax deductions are credited before deducting these fees from the returns that are applied to your account.
• We make a default assumption of 0% indirect costs.

Adviser service fees

• In 'Advanced settings' you can enter the adviser service fees that you are charged.
• We assume the dollar per annum adviser fees are charged mid-year on average and will increase with inflation each year and that the adviser fees charged as a % of your balance are charged mid-year on average.
• We assume that these fees are tax deductible within super.

Insurance fees/premiums

• In 'Advanced settings' you can enter the insurance fees/premiums that are charged annually to your account. We assume the same amount (in today's dollars) will be deducted in future years until retirement.
• Leaving insurance fees at $0 will make a fees comparison easier if you wish to assess the insurance fees/premiums and cover provided separately. Alternatively work out the insurance cost in each fund for the same amount of cover and include this in your fund comparison.
• We assume that these insurance fees/premiums are tax deductible within super.
• We make a default insurance premium assumption that $214 will be charged mid-year on average and will increase with Wage Inflation each year.

Further information

• Super contributions must remain in super until you have met a condition of release. Weigh up the benefits of making additional super contributions against your other priorities, for example paying off debt.
• Details of your super can be found on your latest super account statement or by logging into your super account online.

Q. Can I save this calculator?

A. No, this calculator doesn't currently have a save function. Please let us know via feedback if you would like a save function as we may look to add this feature in the future if it proves a popular request among users.  

Q. Why doesn't this calculator have an optimum mix of super contributions like the previous version had?

In order to upgrade this calculator so that it was available to more people we had to limit some of the functionality. We will be looking at ways to recreate these features in future versions.

Q. Why isn't there a summary or action checklist?

In order to upgrade this calculator so that it was available to more people we had to limit some of the functionality. We will be looking at ways to recreate these features in future versions.

Q. Are there advanced settings I can change?

A. Yes, there are a number of 'Advanced settings' sections at the bottom of the calculator that can be expanded to allow you to change the calculator defaults.

Q. Why can't I enter a retirement age younger than 59 or 60?

A. This calculator estimates your combined super and Age Pension entitlements. You will be able to access your super from your 'preservation age'. This is between the ages of 55 and 60, depending on your date of birth. The calculator will not estimate retirement income from super until you have reached your preservation age.

Q. Why doesn't it allow for an age difference of more than 10 years between partners?

A. When designing the retirement planner we had to put limitations on some things in order for it to work well for the majority of people.

Once the age difference between partners is greater than 10 years it becomes much harder to predict income and Age Pension entitlements. We are aware this is an issue for some people but we don't plan to alter the calculator at this stage.

If you are one of these people you can still use the calculator to give you an idea of how your own super is tracking.

Selecting 'single' as your relationship status and 'no' to including the Age Pension in the 'Advanced settings - other' section, will allow you to estimate how much income your super may provide you when you retire.

Q: My partner and I are the same age and have similar super balances, why is our projected income from super different?

A: Men and women have different life expectancies. On average a woman's super has to last 3 years longer than a man's super which is why a woman's income from super will be lower, all other things being equal.

Q: Can I enter assets outside of super?

A: Yes, in the 'Advanced settings - other' section you can enter the total of all assets outside of super. They will be taken into account when estimating Age Pension entitlements.

Q: Can I enter income from other sources, such as investment income or current super pensions?

A: No, you will need to manually add other income to your estimated income from super and the Age Pension.

Q: If I have other income or assets, won't that affect my Age Pension estimate?

A: Yes, however if you enter other investment assets in the 'Advanced settings - other' section, they will be included in Centrelink calculations as an asset, and income deemed according to Centrelink's deeming rules.

Q: I have a defined benefit super fund, can I use this calculator?

A: No, this calculator only works for accumulation funds. Defined benefit funds have special tax and Centrelink implications and these can differ between defined benefit funds. You will need to get a pension estimate from for super fund.

Q: Can I change the level of income I receive at some time in the future?

A: No, this calculator only projects income at a steady rate throughout your retirement.

Q. Can I change my retirement income?

You can't select your retirement income but you can change your retirement income estimate by changing your retirement age, your personal contributions or any of the fields in the 'Advanced settings' sections.

Q: Why does my super pension increase and decrease over time?

A: The minimum pension you must withdraw each year is calculated as a percentage of your balance, for example at age 65, you must withdraw 5% of the account balance each year. The minimum percentage will increase at age 75 and every 5 years thereafter until you reach age 95.

As your account balance decreases your Age Pension may increase which means you would need to draw less super pension to maintain your income.

Q: Are the income figures before or after tax?

A: Income is estimated before tax although super and Age Pension income is tax free for most people over age 60.

Q: What rate of return does the calculator use, and can I change it?

A: The calculator defaults to average returns for a balanced investment option. Investment options can be changed in the 'Advanced settings' sections for you and/or your partner (if applicable). If you are going to change the returns to reflect your fund, we recommend you use a long term average of 5 years or longer, and change investment fees to 0% as funds usually report returns after all fees and taxes.

Q: Can I change the age my super pension runs out?

A: Yes, in the 'Advanced settings - other' section, you can change the age you want your super pension to run out.

Q: Can I estimate my retirement income without the Age Pension?

A: Yes, in the 'Advanced settings - other' section, you will find a question 'Include the Age Pension?'. Select 'No'.

Q: Is the income estimate in today's dollars or future dollars?

A: All amounts are in today's dollars.

Q: Can I change the rate of inflation?

A: Yes, in the 'Advanced settings - other' section, you can change both the rate of inflation and the assumed increase in living standards.

Q: Will this calculator work for self managed funds?

A: Yes, however you will need to make sure you include all fees, including accounting and auditing fees. Also make sure the rate or return is appropriate for your fund.

Q: Does the retirement planner take into account that I won't be eligible for the Age Pension until age 67?

A: Yes, the retirement planner uses you current age to determine when you can access super and when you will be eligible for the Age Pension.

Q: Can I enter a lump sum contribution to super before I retire?

A: This calculator does not allow for one-off super contributions. If you are close to retirement you could change your super balance to reflect the lump sum contribution you expect to make.

Q: Does this calculator take into account current Centrelink deeming rules?

A: Yes, the retirement planner does take into account the Centrelink deeming rules that came into effect 1 January 2015.