Disclaimer and Assumptions
These projections show illustrative examples of how much superannuation you could accumulate at your chosen retirement age and how long it may last in retirement.
The information is general only and does not take into account your personal objectives, situation or needs. The results are not a representation of actual entitlements or benefits from any particular superannuation product and are not intended to be relied on for the purposes of making a decision in relation to a financial product. Before making any financial decisions consider your own financial circumstances, needs and objectives and consider getting professional financial advice.
The calculator relies upon assumptions that if varied could change the result. The projections assume an investment in a superannuation account in accumulation and retirement phases, as well as a Government Age Pension in the retirement phase. You can choose to exclude the Government Age Pension from the projection or include other regular income in retirement. Other important assumptions are listed below and are based on current laws and their interpretation as at 1 July 2020.
Results are expressed in today's dollars by allowing for future expected wage inflation of 3.5%.
Target income is also assumed to increase at this rate, and future account balances are discounted to present values at this rate. This is intended to reflect both price increases and general standard of living increases. This has the effect of preserving an individual's relative standard of living.
Early access (COVID-19)
The Government is allowing early access to super savings for people affected by Coronavirus (COVID-19). If eligible, you can make one application to access up to $10,000 of your superannuation before 1 July 2020 (for the 2019-20 financial year), and another application to access a further $10,000 from 1 July 2020 to 31 December 2020 (for the 2020-21 financial year).
Applications for the 2019-20 financial year have now closed.
This feature of the calculator is designed to show you the possible impact to your projected retirement savings, in today’s dollars, if you decide to access your super early. It won’t allow you to enter a withdrawal amount which is more than the available super balance.
This feature of the calculator doesn’t consider whether you’re eligible to withdraw money from your super due to COVID-19. Eligible members can apply through the Australian Taxation Office (ATO) via myGov from 20 April 2020 to 30 June 2020, and from 1 July 2020 to 31 December 2020.
Making an early withdrawal from your super may have an impact on your insurance. If you want to maintain your insurance cover, check you have enough money in your super account to pay the cost after making a withdrawal from your super.
For more information visit the ATO website.
Assumed investment returns are used in the calculator, which can be varied. Investment returns are shown after investment fees and taxes. The Cash, Low, Moderate and High options represent investment strategies with different assumed return profiles.
| ||Accumulation return (pa)||Retirement return (pa)|
Please remember that investment returns are not guaranteed.
Investment strategies for Low, Moderate and High options are assumed to be more conservative in retirement, which is reflected in lower assumed returns. Price inflation (CPI) is assumed to be 2.5% pa, which is included in the returns.
Accumulation returns are assumed to be taxed at the relevant rate (based on the percentage of funds invested in shares, and allowing for dividend imputation and the capital gains tax concession if applicable). Retirement returns are assumed to be tax-free. Investment returns are assumed to be credited continuously.
The above assumptions can be edited to create a 'user defined' investment setting. You can alter the inflation rate and the assumed retirement investment return within certain ranges. The user defined accumulation investment return will be automatically calculated to take into account tax and a higher pre-retirement risk. The user defined accumulation investment return will typically be approximately 0.5% higher than the user defined retirement investment return. Before making decisions, you should also consider the risk profile of different investment strategies.
Administration fees and insurance premiums
Fees and insurance premiums are assumed to be as follows:
|Accumulation phase||Retirement phase|
|Weekly admin fee||$2.25||$2.25|
|Asset based fee (no cap)||0.04%||0.00%|
|Asset based fee (with cap)||0.00%||0.11%|
|Asset based fee cap||$0||$750|
|Insurance premiums (per annum)||$500||$0|
|Fee % on contributions||0.00%||0.00%|
Fees are assumed to be tax-deductible in the fund. Insurance premiums are deducted continuously. Dollar fees and insurance premiums are assumed to increase in line with wage inflation. Percentage fee rates are assumed to remain constant over the projection period and the asset based fee cap is indexed to wage inflation. You can alter the default fees across the combined accumulation and retirement phases within certain ranges. All fees and costs included in the table above are deducted from your account balance. However, investment fees and taxes are deducted before the investment returns are credited to your account.
Salary is assumed to increase in line with wage inflation. In any future periods where you have a period of part-time employment, your salary is reduced on a pro-rata basis.
Tax calculations allow for individual income tax rates, the Medicare Levy, the Low Income Tax Offset, Low and Middle Income Tax Offset and the Senior and Pensioners Tax Offset. It does not take into account the Medicare surcharge or any HECS/HELP debt. Threshold and offset amounts in the first year are based on current rates. Thereafter they are indexed in line with wage inflation.
Employer contributions are calculated as a percentage of salary and is defaulted to the Superannuation Guarantee (SG) rates below:
01/07/2014 to 30/6/2021
01/07/2025 and onwards
SG contributions are subject to the maximum super contribution base, which is $57,090 per quarter for 2020-2021. This threshold is indexed annually in line with wage inflation.
If you receive a different amount, you can alter the rate of employer contributions within certain ranges. If you adjust the rate higher than 12%, it will be assumed to remain constant throughout the pre-retirement phase and the minimum SG rates will be ignored.
Regular concessional (before-tax) or non-concessional (after tax) contributions entered by you are assumed to increase in each year in line with your salary. In any periods of part-time work, these contributions are assumed to decrease pro-rata. Regular contributions are assumed to be spread evenly across the year.
The amount of a one-off, non-concessional contribution you enter is assumed to be fixed, and is not indexed.
Concessional contributions up to the concessional contributions cap are generally taxed at 15% on contribution to the superannuation environment. Non-concessional contributions up to the non-concessional contributions cap are not subject to tax on contribution to the superannuation environment. Where a concessional or non-concessional contribution exceeds the corresponding legislated contribution limit, the contributions are subject to additional tax which is assumed to be levied in the personal income tax environment.
For the 2020-2021 financial year the annual general concessional cap is $25,000.
To the extent that the combined amount of income and concessional contributions for a particular financial year exceeds $250,000, concessional contributions are assumed to be subject to tax at 30% on contribution to the superannuation environment.
For the 2020-2021 financial year the non-concessional cap is 4 times the general concessional cap, being $100,000. This can be increased by up to $300,000 under the 'bring-forward' rules. The additional amount which can be contributed depends on account balance and age:
- If an account balance is under $1.4m an individual can 'bring-forward' this and the next two years of contributions, and so can contribute $300,000.
- If an account balance is between $1.4m and $1.5m an individual can 'bring-forward' this and the following year of contributions, and so can contribute $200,000.
- If an account balance is between $1.5m and $1.6m (or if an individual is aged between 65 and 74 years old), the individual is not able to bring forward any future year’s contributions, and the non-concessional contribution cap is equal to the annual cap of $100,000.
- If an account balance is over $1.6m (or if an individual is aged 75 years old or older) individual’s non-concessional contributions cap is $0.
The non-concessional cap under these 'bring-forward' arrangements also represents the total amount of eligible non-concessional contributions within the bring-forward period. However, it does not take into account any non-concessional contributions made in previous financial years.
The calculator enables you to enter both regular annual non-concessional contributions and a one-off lump sum non-concessional contribution. If in any year the combination of these would exceed the relevant non-concessional contribution cap, the calculator will limit the contributions to the cap amount; if this occurs you will receive a message.
The concessional and non-concessional contribution limits are indexed in line with wage inflation.
In each projection year, eligibility for a Government co-contribution is assessed based on salary (the calculator does not take into account any reportable fringe benefits that may affect eligibility for a co-contribution) and non-concessional contributions. A co-contribution of up to $500 is made to the superannuation account if individuals make non-concessional contributions and their salary is below the lower income threshold. The co-contribution amount is pro-rated if their salary is between the lower income threshold and the upper income threshold.
The co-contribution income thresholds are indexed in accordance with wage inflation. For the current co-contribution income thresholds, visit the Australian Tax Office (ATO) at www.ato.gov.au/rates
Life expectancies allow for future mortality improvements. They were derived based on the medium mortality rate assumptions in the Australian Bureau of Statistics in 'Population Projections, Australia, 2006 to 2101'.
Government Age Pension
Current Government Age Pension thresholds and rates of payment are allowed for, based on the Single/Couple and Homeowner status. If 'Couple' is selected, the partner’s superannuation assets can be entered and all other income and assets are assumed to be combined between the user and their partner. Thresholds are indexed in line with price inflation and rates of payment are indexed in line with wage inflation. It is assumed the qualification requirements for the Government Age Pension under social security legislation are satisfied.
The Government Age Pension is subject to an asset test and an income test. You can enter other investment assets outside super, which is used for the asset and income test only. The projection assumes that in retirement, all assets (superannuation and assets outside superannuation) are placed in an account-based pension. The Government Age Pension income test is therefore calculated on the basis of deemed income on all assets.
You can enter an additional income amount. This amount represents any regular income received throughout retirement in addition to drawdowns from superannuation and Government Age Pension, and will be reflected in the projected income. The additional income entered will not be included in the income test for Government Age Pension.
The assets outside super and any additional income entered, are assumed to increase each year in line with wage inflation.
The Department of Human Services rate estimator lets you estimate your payment rate for the Government Age Pension, based on your current or proposed circumstances and assists with working out if you will be eligible for a payment.
We have not considered any other Government benefits apart from the Government Age Pension. Contact Centrelink to confirm your eligibility for the Government Age Pension as the projections are examples only and have not considered your personal situation.
Transfer balance cap
The transfer balance cap restricts the amount that can be transferred into an account-based pension. At 1 July 2020 the cap is $1.6m and will increase in $100,000 increments in line with wage inflation. Based on current indexing, adjustments will occur every three to four years. If at the time of retirement the projected account balance exceeds the (indexed) transfer balance cap, the maximum possible amount is assumed to be transferred into an account-based pension and any excess balance retained in an accumulation account.
Minimum income payment in retirement
The Government sets the statutory minimum amount that must be paid as an income each year during retirement, once funds have been converted to an account-based pension. The calculator doesn’t account for the statutory minimum income payment amount. If the income payment in the calculator is less than the statutory minimum your account balance during retirement may be exhausted sooner than shown in the calculator.
The target income defaults to 75% of your annual after-tax income. This can be changed within certain ranges.
To achieve the target income, the amount drawn from superannuation in retirement is calculated as:
Target income (which can be specified) less other income (which can be specified) less any Government Age Pension amounts (as calculated by the calculator).
Where the transfer balance cap is exceeded at the time of retirement, the excess will be invested in an accumulation account and will result in both an accumulation account and a pension account. In the scenario where the target income is in excess of the statutory minimum drawdown for the pension, the income will first be drawn from the pension account up to minimum amount and the excess income required to attain the target income will be drawn from the accumulation account.
Last updated: July 2020