RETIREMENT LIFESTYLE CALCULATOR

General assumptions and limitations

1. The calculations are a general illustration of an accumulation account that converts to an account-based pension at nominated retirement age.
2. This calculator assumes you own your principal home outright at your specified retirement age.
3. The default Consumer Price Inflation rate (CPI) used is 2.5% pa. This rate has been based on historical and expected future rates and is the mid-point of the RBA target range for inflation. The actual rate of price inflation may differ significantly from this assumption.
4. The default salary inflation rate is based on the default price inflation rate plus 1.5%. Historic analysis indicates a long term difference between price and salary inflation of approximately 1.5% and is in line with the Australian Government Treasury’s dynamic microsimulation Model of Australian Retirement Incomes and Assets (MARIA). Accordingly, the default salary inflation assumption is 4.00% (calculation: 2.5% price inflation plus margin over this of 1.5%). The actual rate of inflation may differ significantly from this assumption. You may specify a rate different from the default rate to see the effect that this may have.
5. No allowance has been made for taxes (including tax on retirement income) with the exception of tax within the super fund. If any other taxes apply, the results will be incorrect and will not apply to you.
6. It is assumed that yearly income is paid in the middle of each year.
7. The maximum gross salary that can be entered into this calculator is $250,000.
8. No allowance has been made for the higher contributions tax on concessional contributions for individuals with adjusted taxable income over $250,000.
9. This calculator is not suitable for members of defined benefit funds. If you are a member of a defined benefit fund you should contact a financial adviser for projection calculations.
10. Interest on your account balance is calculated and credited at 1 July each year.
11. The calculator assumes that the date set on your computer is correct. Projections are started from this date and your age is also assumed to be at this date.
12. You are fully retired at nominated retirement age. There is no allowance for transitioning to retirement.
13. The 'Comfortable lifestyle' and 'Modest lifestyle' benefits are based on a survey by ASFA Retirement Standard (July 2021) stating that the total annual income needed to fund a comfortable retirement is $44,412 pa (single) and $62,828 pa (couple) and a modest retirement is $28,254 pa (single) and $40,829 pa (couple).
14. The 'Comfortable Plus lifestyle' benefit amount has been calculated by adding to the total 'Comfortable' figure the percentage jump amount between the 'Modest' and 'Comfortable' figures.
15. The results displayed by this calculator are in today's dollars, not in future dollars.
16. The calculated life expectancy is based on Australian Life Tables for year 2015-17.
17. Retirement age must be at least 2 years greater than your current age, allowing for at least 1 financial year of projections.

Assumptions for the accumulation phase of the projections

1. Gross salary is increased with a default salary inflation rate of 4.00% pa.
2. Employer contributions are defaulted to the current rate of 10% pa under Superannuation Guarantee legislation for employees and are subject to 15% contributions tax. You can enter an amount less than this and this amount will then be used throughout the projection. If an amount is entered that is equal to or greater than the default rate of 10% pa under Superannuation Guarantee legislation for employees, then these contributions are assumed to not be less than the minimum amount you are entitled to under Superannuation Guarantee legislation through the projection and are subject to 15% contributions tax. An allowance has been made for the maximum superannuation contribution base ($58,920 per quarter for the 2021/22 financial year).
3. Salary sacrifice, personal deductible contributions and other employer concessional contributions are limited by the lower of the concessional contribution cap and also 100% of gross salary for superannuation purposes, whereas after tax (non-concessional) contributions are only limited by the contributions cap.
4. Investment earnings (net of tax) are credited to your account balance at the nominated investment return. The default rate is 6% pa for the accumulation phase. This is based on an actuarial recommendation for a balanced investment taking into consideration comparisons from government, retail and industry funds. You may specify a different rate of investment return (in 'Default settings'). The actual rate of return for your investments may differ significantly from this assumption.
5. A default amount of $5 per month plus 0.8% management fee and 0.8% adviser fee is provided for 'Fees deducted'. You may change the default amounts to see the effect that this may have. The actual fees deducted from your investment may differ significantly from these assumptions. These default rates are the average fees from our range of products.
6. A default amount of $4.11 per week ($214 per year and indexed with the salary inflation rate) is provided for 'Insurance premiums deducted'. This is the same assumption used in the Treasury’s MARIA report. You may change this amount to see the effect that this may have. The actual insurance premiums deducted and the impact on your investment may differ significantly from this assumption. Insurance premiums vary significantly between individuals and it is important to consider your financial circumstances, the effect that insurance premiums can have on your retirement savings, the product disclosure documents and any financial adviser before making a decision.
7. The required income is indexed to inflation.
8. Government Super Co-contribution has been included in the calculation. This has been based on the gross salary and after tax contributions that have been entered into the calculator.
9. The super co-contribution lower income limit for the purposes of the projection is increased with a default salary inflation rate of 4.00% pa. The actual rate of inflation may differ significantly from this assumption. You may change the default rate to see the effect that this may have.
10. An allowance for the low income super tax offset (LISTO) has been included in this calculator. The LISTO salary threshold is indexed with a default salary inflation rate of 4.00% pa. The actual rate of inflation may differ significantly from this assumption. You may change the default rate to see the effect that this may have.
11. Concessional (pre-tax and Superannuation Guarantee) contributions are capped at a maximum of $27,500 and indexed (increments of $2,500). This calculator does not cater for carry forward concessional contributions. After-tax contributions are capped at a maximum of four times the concessional contributions limit (currently $27,500) in the projection of the account balance.
12. No allowance has been made for government benefits or other income sources prior to retirement with the exception of the Government Super Co-contribution. If any of these other income sources apply before retirement, the results will not give a true reflection of the longevity of your own resources in retirement.
13. No allowance has been made for spouse contributions.

Assumptions for the retirement phase of the projections

1. Investment earnings (net of tax) in the retirement phase are credited to your pension account balance at the nominated investment return. The default rate is 6.75% pa for the accumulation phase. This is based on an actuarial recommendation for a balanced investment taking into consideration comparisons from government, retail and industry funds. You may specify a rate of investment return different from the default rate. The actual rate of return for your investments may differ significantly from this assumption.
2. These calculations make no allowance for the effect of an account-based pension continuing on death to a surviving spouse.
3. The minimum pension factors table is current as at 1 July 2021.
4. A default amount of $5 per month plus 1.6% management fee is provided for 'Fees deducted'. You may change the default amounts to see the effect that this may have. The actual fees deducted from your investment may differ significantly from these assumptions. These default rates are the average fees from our range of products.
5. These calculations make no allowance for any entry fees, service fees, administration fees or switching fees deducted from your pension account.
6. These calculations make no allowance for any income payment fees deducted from your account-based pension account.
7. Current Centrelink Age Pension rules have been applied to this calculator.
8. The Age Pension will increase with CPI.
9. The Age Pension applies if the assets test and the income test applied to this calculator do not exceed the maximum thresholds.
10. If a partner is selected, the Age Pension entitlements are assessed as a couple.
11. The income test is based on all income derived from:
    a. account-based income stream
    b. partner's account based income stream
    c. income from personal and financial assets outside super
    d. deemed income from financial investment assets.
    
12. Deemed income from financial investment assets is calculated using the current deeming rates rules. You can find further details about deeming rates here http://www.humanservices.gov.au/customer/enablers/deeming
13. The asset test is based on the following assets:
    a. account-based income stream account balance
    b. partner's Account-based income stream account balance
    c. personal assets (eg personal belongings
    d. financial investment assets (eg bank account, shares)
    e. non-financial investment assets (eg rental property).
    
14. Non-superannuation investments are assumed to be invested more conservatively than superannuation/allocated pension assets, and allowing for personal assets to increase in value at the rate of price inflation. Based on this assumption and an actuarial recommendation, the following default rates are applied:

    Asset type	Growth rate	Income rate
    Financial investment assets (eg shares, bank account)	3.0%	3.0%
    Personal assets (car, clothes etc)	2.5%	0%
    Non-financial investment assets (eg rental property)	3.0%	3.0%

15. The income test and asset test thresholds are increased with CPI.
16. An allowance is made for deductible amount which has been calculated as the balance of the account based income stream at retirement divided by the life expectancy.
17. The required income in retirement (RIIR) is default to the 'Comfortable lifestyle' (ASFA Retirement Standard - July 2021). The amount is made up of the following income (in order):
    a. funds available from assets outside of super (eg bank account)
    b. income from personal assets (if any)
    c. income from financial investment assets
    d. income from non-financial investment assets
    e. minimum pension from the account-based income stream
    f. minimum pension from the partner's account based income stream
    g. Centrelink Age Pension.
    
18. Should the income from these sources be less than RIIR, then deficit is obtained by proportionally increasing the pension from the account-based income stream and the pension from the partner's account based income stream.