Assumptions
It is important to note that this a projection and not a prediction.
The results from this projection tool are based in the limited information that you have provided and assumptions made about the future. The amounts projected are estimates only provided by this model and are not guaranteed.
This projection tool cannot predict your final superannuation benefit with certainty because this will depend on your personal circumstances including unexpected events in your life and external factors such as investment earnings, tax and inflation. This projection tool assumes that you can make steady predictable contributions and that all assumptions including these external factors will operate at set, steady rates for as long as you remain in the fund, even if events turn out differently from what is assumed. These assumptions are essential so the projection tool can show the effect of things you may be able to control.
Do not rely solely on this projection tool to make decisions about your retirement, there may be other factors to take into account. Consider your own investment objectives, financial situation and needs. You should obtain advice from a licensed financial adviser.
Accumulation Super Products Only
All projections assume super products are accumulation style products. It should not be used for retirement phase products.
It is not designed for use in relation to defined benefit super arrangements or for the self-employed.
All projections assume that your super account balance will receive all income and outgoings mid-year.
Results are in Today’s Dollars
All projection output values are shown in today’s dollars, which means they are adjusted for inflation.
Inflation Factors
The following assumptions are made relating to inflation:
- 2.5% each year due to the rising cost of living (CPI inflation).
- A further 1.5% each year due to the cost of rising community living standards.
These are based on guidance provided under ASIC Corporations (Superannuation Calculators and Retirement Estimates Instrument 2022/603) effective 1st January 2023.
Age
The age used in the projection tool must be above 17 and below 67. It will be used to set date of birth for the calculation.
It assumes that user’s birthday will be the following day to ensure growth on a portion of a year will not overinflate retirement figures at this stage.
The age is also used to determine the amount of insurance cover the user has if formula type cover is specified.
Gender
This is mandatory, as this field is used to determine the insurance rates applied.
Salary
The maximum salary value that can be entered is $2,000,000. This will be used to determine the annual concessional contributions made, as well as annual insurance costs for formula type cover.
The salary value will vary over the projection in line with the Future Long Term Salary Increase (currently 3.2%) and salary scale values used within the algorithm.
Multiple Super Accounts
The answer provided in this field has no bearing on calculations.
Super Balance
This field will determine base from which calculations are performed. Starting balance cannot exceed $2,000,000.
It will update year on year as the projected value updates.
Type of Super / Which Fund
These two fields in conjunction will determine the product used for the ‘current’ or base case projection which will then be compared against other funds out of default options. Values used (e.g. administration costs and insurance premiums) are based on the most current PDS version of the product selected.
Insurance
The insurance selection determines the type and amount of Death and TPD cover used within the projection.
Selecting ‘No’ will result in nil insurance within the projection.
Selecting ‘Fixed’ will give an amount of between $150,000 and $300,000 for both Death and TPD, age dependent.
Selecting ‘Not Sure’ will give the same results as selecting ‘Fixed’.
Selecting ‘Formula’ will set them with Death and TPD cover to the value of 15% of Salary x (65 – Age), which adjusts for every year of the projection with updated values.
It is assumed an overall insurance category of fixed “White Collar”
Death and TPD cover ceases at age 65.
No income protection insurance is included in the projection tool.
Concessional Contributions – Employer
The projection tool assumes that the user’s employer contributes the mandatory super guarantee (SG) rate of 10.5% of their gross annual salary.
In future years we assume that:
- Employer contributions will increase with inflation;
- The user will satisfy the work test at older ages and are able to contribute;
- The employer contribution rate will increase by 0.5% per annum from 1 July 2021, before reaching and staying at 12% from 1st July 2025 onwards.
Pre Tax Contributions – Salary Sacrifice
Salary sacrifice is fixed at Nil for current situation (default) and $1,040 p.a. (i.e. $20 per week) for projected value to demonstrate the benefit of making extra super contributions.
Post Tax Contributions
No allowance is made for post-tax contributions in the calculations.
Government Contributions
No allowance is made for co-contribution within any of the calculations.
Low Income Superannuation Contributions
No allowance is made for low-income super contributions within any of the calculations.
Excess Contributions Tax
No allowance is made for excess contributions tax, whether concessional or non-concessional within this projection tool.
Investment Options
All current super projection calculations assume user is invested in the selected super product’s default investment option (i.e. My Super).
All proposed strategy calculations assume the user is invested in an out of default SuperWiser model portfolio.
Forward looking return assumptions are set by the APL Committee of the Licensee. These include a component for target return based on the risk profile of the investment.
Tax File Number
It is assumed for all calculations that user has provided their Tax File Number to their superannuation fund.
Administration Fees
The calculation assumes the dollar per annum administration fees are charged mid-year on average and that the administration fees charged as a percentage (%) of your balance are charged mid-year on average.
It is also assumed that these fees are tax-deductible within super.
Contribution Fees & Taxes
The calculation assumes that there are no contribution fees.
It is also assumed that 15% tax is deducted from concessional contributions (i.e. SG contributions and salary sacrifice) when they are received.
All investment returns are assumed net of related taxes.
Investment Fees
Investment fees represent both direct and indirect costs in relation to the management of the investment. These fees and costs are normally deducted from investment returns before returns are declared.
Therefore, it is assumed that target returns used in the projection are net of all investment costs.
Adviser Service Fees
No adviser service fees are included in the calculation.
Insurance Cover & Premiums
Insurance premiums are assumed to be charged annually to your account.
Insurance premiums rates are assumed to be those that are disclosed within the Product Disclosure Statements for the corresponding super product.
The same cover is applied to each product option on the basis that you require this amount of insurance.
Insurance premiums will be deducted in future years until age 65.
Calculation Date
All calculations will utilise the current date (i.e. the date that the user clicks on the calculation button).
Results Shown As At 1 July
Projected income in retirement is shown as at 1 July after user reaches their indicated age on the chart. For example, the super balance shown for age 65 is the balance at 1 July after their 65th birthday.
Retirement Age
Results are shown at user’s retirement date, which is assumed as their 67th birthday.
Pension Escalation Rate
Is aligned with Future Long Term Salary Increase rate, i.e. linked to value of inflation to provide a stable pension throughout retirement phase. This is currently at 3.2% p.a.
Further Information
It is assumed that super contributions will remain in your super account until you have met a condition of release.
This projection tool does not take into consideration non-super assets or potential entitlement to Centrelink age pension in retirement.
It is recommended that you weigh up the benefits of contributing extra to super against your other priorities, for example paying off debt.