About this calculator - Retirement income estimate
The calculator has been provided in good faith by the Trustee of Cbus, United Super Pty Ltd ABN 46 006 261 623 AFSL 233792.
The Trustee does not intend that this calculator will influence your decision about your super or any financial product and no such intention should be inferred. Before making any decisions you should also read the additional information in the disclaimer tab, and consider obtaining financial advice appropriate to your circumstances,
What does this calculator let you do?
This calculator is for educational purposes. It can illustrate the broad impact different levels of superannuation may have on income in retirement using an estimate of your superannuation balance at your selected retirement age (in today's dollars, which means results are adjusted for wage inflation). In this way the calculator allows you to project how changes to your circumstances (such as how much you contribute, the investment performance and the fees you pay) could make a difference to your retirement. It also allows you to estimate your average retirement income over the projection period. Estimated retirement income will depend on various factors, including:
- the amount and frequency of regular pension payments made from the account-based pension and taxed superannuation account (where applicable). It is assumed you will invest your superannuation balance up to the Transfer Balance Cap into an account-based pension when you retire. 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.
- any Government Age Pension you are expected to receive
- your partner's circumstances
Limitations
This calculator relies on extensive assumptions to create benefit projections. Whilst users can change many assumptions via the Settings page, this tool is generic in nature and does not replace personalised advice tailored to your individual circumstances.
Browser settings
Using your browser in private or incognito mode will impact some of the functionality of this calculator. The fund recommends switching to standard browser mode before using this calculator.
Session timing
Your session will auto-refresh after 10 minutes of inactivity and any data entered will be deleted. No data is saved or retained when using this calculator.
Assumptions
The results this calculator produces are based on some key general and default assumptions. The default assumptions used are explained below. The default assumptions have been based upon current laws and their interpretations which in the opinion of the issuer of the calculator are reasonable for the purpose of determining the estimated projections of retirement income and superannuation balances when producing your results
You can change the default assumptions in the ‘Settings’ if they do not apply to you (and/or your partner), or if you wish to see how different assumptions affect the results. Any alteration you make or input you provide will be assumed to apply for the whole of the calculation period. Consequently, you should be aware that what actually eventuates is likely to be different from what is assumed will occur and that even small changes to assumptions can make large differences to your results.
Applicable law
Calculations are based on relevant laws current as at March 2024 and are subject to change.
Investment returns
It is assumed the default investment returns shown in ‘Settings’ will apply. You should adjust these default investment returns if they do not reflect the nature of how your retirement savings are invested now or in the future.
- You can vary the default investment return assumption applicable to your investment option in the 'Settings' section of the calculator to see how higher or lower average returns affect the projection.
- The default investment returns assumed in the calculation, is based on the return objective for the default investment options - Growth (MySuper) over the accumulation phase and Conservative Growth over the draw down phase. It is not a guaranteed rate of return.
- It is assumed you will retain your chosen before-retirement return throughout the projection for your taxed superannuation account, including any projected superannuation balances above the Transfer Balance Cap at the time of your retirement.
- It is assumed you will retain your chosen after-retirement return throughout the projection for your account-based pension account.
- Investment returns are based on the crediting rate which is the return minus investment fees, taxes, and until 31 January 2020, the percentage-based administration fee. Excludes fees and costs that are deducted directly from members’ accounts.
- Whilst the investment returns are assumed to be constant for the whole period, actual returns will differ from the assumptions used; they may vary significantly from year to year and could be negative in some years, which can lead to meaningful variations in the actual outcomes achieved.
Other financial assumptions
We make the following default assumptions (which you can change in the ‘Settings’ page). You can vary these assumptions to see how higher or lower average inflation or salary growth affect the projection. Price inflation and wage inflation are assumed to remain constant throughout the respective period of time. Actual experience may vary significantly from year to year and could be negative in some years.
- Wage inflation of 4.0% p.a., and
- Price inflation of 2.5% p.a..
Price Inflation is used to inflate the following legislative factors throughout the projection:
- Age Pension assets means testing threshold
- Age Pension income means testing threshold
- Age Pension payment rate for the period after retirement
- Deemed income asset thresholds
- Transfer Balance Cap (increases only applied in $100,000 increments).
- your retirement spending in retirement is inflated over the projection with price inflation for the period during retirement
Wage growth is used to inflate the following legislative and other factors throughout the projection:
- your and your partner’s (if applicable) annual income / salary and contributions to super
- your retirement spending in retirement is inflated over the projection with wage inflation for the period up to retirement
- value of non-financial assets
- Age Pension payment rate for the period up to retirement
- 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
- dollar based administration fees and insurance fees
Annual income
If you enter your pay as “take home” pay, this is your pay after tax has been deducted, and after all superannuation contributions you make have been deducted. If you enter your pay as “before tax” pay this is your income from employment, including any bonus payments, before tax and excluding superannuation and any other packaged benefits.
Contributions
We assume that you are able to contribute into super because you have been in gainful employment* for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contribution is made.
*Gainful employment means being employed for gain or reward in any business, trade, profession, vocation or calling, occupation or employment.
The calculator does not allow you to exceed the concessional and non-concessional contributions limits relevant to your age. This assumption is reasonable as many employers will limit their contributions to the concessional contributions cap, but if yours does not then you could end up with a different amount. At March 2024, the concessional contributions cap is set to $27,500 for all individuals. It is assumed the non-concessional contributions cap will continue to be set at 4 times the concessional cap, hence will increase at the same time as the concessional contributions cap in future years. Should your projected total superannuation balance exceed the projected Transfer Balance Cap at any year in the projection, your projected non-concessional contributions will be restricted to zero for that year.
This calculator does not allow for personal deductible super contributions for sole traders or partners in partnerships.
Cashflow timing
The calculator assumes your account balance will receive all contributions and earnings and pay all outgoings mid-year, apart from the Government co-contribution which is assumed to be received at the end of the year.
Employer contributions excluding before-tax (salary sacrifice) contributions
It is assumed that your employer contributes the default Superannuation Guarantee (SG) rate or your nominated Employer Super contribution rate, as a percentage of your annual before tax pay. The annual before tax pay used for employer contributions is not limited to the maximum super contribution base. If your employer does limit SG contributions to the maximum super contribution base then you could end up with a different amount. The calculator assumes that these employer contributions will increase to the extent required to meet the employer's SG obligations under government legislation. Refer to the Australian Taxation Office (ATO) website for details.
In future years it is assumed that your income and therefore employer contributions will increase with wage inflation. Future contribution levels will depend on uncertain factors such as salary levels, rate of salary growth and time out of the workforce for any reason. While the calculator makes some default assumptions about contributions, contribution levels are not guaranteed.
Before tax (salary sacrifice) contributions
It is assumed that any before tax contributions will increase with wage inflation over time.
After tax contributions
In future years it is assumed that your After-Tax contributions will increase with wage inflation over time.
The calculator will not allow you to enter additional regular contributions greater than your Salary or the non-concessional contributions cap.
Government co-contribution
The total income used by the calculator to estimate if you qualify for any co-contribution is equal to your annual salary before tax and before any salary sacrifice. Any income from other sources and other available adjustments are not included in an estimate of total income. Eligibility for the Government co-contribution is also subject to minimum working requirements. For the full definition of 'income' used by the Australian Taxation Office (ATO) and other details on Government co-contribution rules and limits, refer to the ATO website at www.ato.gov.au.
Low income superannuation tax offset
The total income used by the calculator to estimate if you qualify for a Low Income Super Tax Offset (LISTO) is equal to your salary before tax and before any salary sacrifice. Any income from other investments is not included in an estimate of total income. Eligibility for low income superannuation tax offset is also subject to age restrictions and minimum working requirements. For the full definition of 'income' used by the ATO and other details on LISTO rules and limits, refer to the ATO website at www.ato.gov.au.
Transfer Balance Cap
From 1 July 2017 there is a cap on the amount of superannuation eligible to be transferred to account-based pensions in retirement.
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 the Government, as calculated in accordance with age pension rules as at March 2024, will increase with wage inflation for the period up to retirement and price inflation for the period during retirement.
If you include your partner in the retirement projection, the calculator will show age pension entitlements 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. You should talk with Centrelink or your financial adviser to ascertain what age pension you may be eligible for.
If you choose to include your partner's details in the projection, the calculator assesses your age pension entitlements and 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.
In applying the assets test and income test to estimate how much age pension you (and your partner where applicable) will receive, the calculator takes into account the information you provide about personal assets, investments outside super and your superannuation accounts.
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 inflation shown in ‘Settings’. The calculator assumes your personal assets and investments outside super increase in line with wage inflation in future years, as shown in ‘Settings’.
As a default, the calculator assumes you own your own home, 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.
Administration fees
It is assumed the default fees shown in ‘Settings’ will apply. You should adjust these default fees if they do not reflect the fees you are actually paying.
Dollar based administration fees, but not percentage based administration fees, are assumed to increase with wage inflation each year.
It is important to note that there may be other fees that may impact your superannuation. These fees may be deducted from your account (for example, fees for financial advice or other service or activity fees) which is not reflected in this calculator.
Insurance fees
The cost of holding insurance cover in your super account has not been considered in this calculator due to the personalised nature of the premium costs.
However, in 'Settings' you can enter the annual insurance premium that you are charged to your super account to reflect the insurance premiums you are actually paying. The calculator will then assume the annual insurance premium (assumed to increase with wage inflation each year) will be deducted in future years until you retire in projecting your super account balance to retirement.
Results are shown in today’s dollars
By default, the results shown in the calculator are in today's dollars meaning they are deflated back to today’s dollar value using a wage inflation before retirement and price inflation during retirement to determine the present value of projected amounts. You can edit these assumption variables in ‘Settings’.
Results are shown at 1 July
Your projected total super balance is shown at 1 July after you reach your retirement age in your results. 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 chosen) will retire on the 1 July after reaching the selected retirement age.
- if you select an age to work part-time this will be from 1 July after reaching this age.
- if you make a one-off contribution, this will be made mid-year in the financial year beginning 1 July after your selected age.
Include your partner
Including your partner (if any) will allow a better estimate of the age pension to be provided to you as a couple. If you do not include your partner the projection is likely to be a less accurate estimate of your age pension entitlements. Please note that the calculator only allows for an age difference between you and your partner of 10 years or less. If one member of a couple ceases working prior to the other, the calculator does not take into account your income needs prior to both members being retired. This could mean that your retirement income may be overstated.
Life expectancy
The life expectancy information is based on population mortality as shown in Australian Life Tables 2015-2017 published by the Australian Government Actuary in December 2019 allowing for the improvement rates in longevity over the past 25 years continuing in the future as set out in those tables. The life expectancy shown is for a person of the same gender who has already survived to your nominated retirement age.
By default this calculator assumes you retire at 67 and retirement drawdowns continue until age 92.
Drawdowns in retirement
To commence an account-based pension or receive a payment from your superannuation account in addition to any Government age pension, it is assumed you (and your spouse where applicable) have retired on or after reaching preservation age or reached age 65, and have converted any superannuation savings up to the Transfer Balance Cap to an account-based pension product with certain default features which you can change.
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 the desired target 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 draw down 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 which may result in a higher income being paid to you in some years. It does not take into account any tax that may be payable on income received from superannuation before age 60.
Retirement income
The calculator determines the retirement income such that the total of your superannuation account and account-based pension account will last until 1 July after the pension recipient reaches their life expectancy. Until then, the account-based pension and superannuation account (if applicable) will pay an income which can be combined with any age pension. Once life expectancy is reached, it is assumed the age pension will continue (where eligible). You can select a different age, other than the assumed life expectancy, in 'Results'.
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 the projection results. Income from any other investments is not included in your estimated annual income in retirement.
Tax
It is assumed that you have provided your tax file number (TFN) to your superannuation fund and that, consequently the usual concessional tax rate of 15% tax is deducted from employer contributions including before-tax (salary sacrifice) contributions.
The calculator assumes that any other taxes are paid by you outside your superannuation account, including (if applicable):
- Excess Concessional Contribution tax
- Excess Non-Concessional Contribution tax
- Division 293 tax (payable by higher income earners)
No income tax has been applied to estimated retirement income in the results of the calculator.
The tax assumptions used are general in nature only and do not constitute tax advice. Please see your tax adviser for advice that is specific to your individual circumstances.