Retirement projection calculator assumptions

Retirement Projection Assumptions

1. Income refers to before tax (gross) income from employment excluding any superannuation guarantee contributions. Any income from other sources (such as investments) is ignored.
2. Retirement income is tax free after age 60. No allowance is made for income tax prior to age 60.
3. Eligibility to contribute to superannuation is assumed.
4. Superannuation Guarantee (SG) contributions are assumed at 9% of the income figure input into the calculator or higher if the variable assumption is altered. It is assumed that your employer will continue to contribute based on the pre-salary sacrificed income – this should be confirmed with your employer as your employer may pay SG contributions on the lower income after the salary sacrifice deduction.
5. A tax rate of 15% is applied to all employer contributions.
6. No allowance has been made for the maximum earnings base for SG contributions.
7. Contributions to superannuation are generally preserved until retirement and you will not be able to access them until that time.
8. Preservation age varies according to your date of birth. This calculator assumes the highest preservation age based on the age you have entered.
9. Life expectancy is based on the Australian Life Tables, 2005-2007 as published by the Australian Government Actuary(27 November 2009).
10. The concessional contribution cap for those aged up to 50 is $25,000. Those aged 50 and above have a cap of $50,000.
11. The non-concessional contribution cap is $150,000 (2010-2011FY). Eligible individuals can bring forward a further two years of non-concessional contributions to a maximum of $450,000 over three years. This calculator does not take into account the bring-forward rule.
12. The calculator does not consider the tax implications where the proposed contributions are in excess of relevant contribution caps.
13. This calculator will not allow you to enter a retirement age less than your preservation age or greater than 75.
14. Estimated projection results are shown in today’s dollars.
15. A default investment earnings rate of 6% has been estimated to determine the retirement projection balance. This has been chosen as a reasonable rate as it relates to our target for the default investment option; “Growth”. This rate is an estimate after all fees and premiums have been deducted. The actual rate may differ significantly depending on market movements, your investment options and fees.
16. Retirement income is taken as a simple lump sum amount annually and is paid mid-way through the year.
17. Contribution caps are indexed to inflation in $5,000 increments(rounded down).
18. Government co-contribution is assumed to be received where income and post-tax contribution entered indicates eligibility. The $20 minimum co-contribution is not applied.
19. Contribution caps are based on the inputted age in step 1. Retirement income results are based on the retirement age.
20. Variable assumptions for this calculator have the following maximums for optimum performance: Employer contributions – 15%, Investment returns – 12%, Salary increase –6%, Inflation – 6%
21. You must draw a mandatory minimum income each year upon retirement, which varies based on your age. Your retirement income will be adjusted to the minimum, if you have entered an amount below the minimum.