The calculator does not constitute any form of general or personal financial product advice.
This calculator is intended for illustrative purposes only and provides factual information, based upon a set of statutory assumptions, assumptions based on legalsuper data, and assumptions that the user may be able to adjust. The calculator does not and is not intended to provide any form of general or personal financial product advice and should not be relied upon by the user as providing any form of general or personal financial product advice. The calculator neither makes, implies nor intends to make or imply any recommendation or opinion about your superannuation.
The calculator is not intended to be relied on for the purposes of making a decision in relation to a financial product, and the assumptions that you may be able to adjust may not entirely reflect your own objectives, financial situation and needs. In making any decisions about your superannuation or your retirement you should consider your own objectives, financial situation and needs. You should consider obtaining advice from a licensed financial adviser before making any decisions.
This calculator attempts to include the most significant features of the superannuation environment, and to do so in an accurate manner. However, a calculator such as this is not able to address all facets of superannuation. The most significant limitations are:
- The calculator performs a 'deterministic' projection.
This means that the assumptions such as investment returns are assumed to be constant every year, at the rates indicated above. The actual investment returns will vary from year to year. Higher growth (higher risk) investment options, with higher expected returns, would be expected to exhibit a more significant range of outcomes than lower growth (lower risk) investment options. The calculator does not show the range of possible outcomes.
In this calculator, selecting a more aggressive investment option will present a more favourable outcome. However, there is also likely to be more uncertainty attached to this outcome. You should consider this carefully before selecting an investment option.
- The calculator does not include the capacity to make 'bring-forward' concessional contributions.
- Deemed income on all other assets.
As described below (see “Age pension”), when assessing age pension eligibility, the calculator considers deemed income on all assets (both rental property and non-rental property assets). This means that if you have significant rental income from investment properties this calculator may not be appropriate to use, and personal financial advice should be obtained.
This calculator is intended for illustrative purposes only.
The results provided by the calculator are estimates only and are not guaranteed on the basis that the assumptions used are likely to change over time and, in some cases, are based upon historical data including data provided by third parties to Legal Super. Actual outcomes depend on uncertain factors such as salary increases, investment returns and changes to the statutory assumptions. If any of these assumptions change, you should consider whether past calculator estimates remain relevant to you.
Superannuation calculator assumptions
The calculator relies on a set of statutory and fund-based assumptions, as well as assumptions that the user may adjust. These assumptions are considered reasonable as they are based upon statutory rates and requirements, Australian Bureau of Statistics data and legalsuper-specific data. This data may change from time-to-time.
The projection allows for future wage inflation of 4.0% pa and future price inflation of 2.5% pa.
Results are expressed in today's dollars by discounting with wage inflation in the accumulation phase and price inflation in the pension phase.
Target income is also assumed to increase at this rate.
These assumed inflation rates and the approach to discounting are consistent with ASIC Corporations (Superannuation Calculators and Retirement Estimates) Instrument 2022/603.
You can change the assumed price and wage inflation rates in the 'Edit assumptions' section.
Results are in today’s dollars
Results are shown in today's dollars. This means the amounts shown are adjusted for inflation (and so take into account the assumed change in the cost of living between the time of preparing the estimate and the future time).
The assumed rate of wage inflation has been used to discount future amounts to today’s dollars.
You are able to enter your current salary on the initial 'About you' screen. Your salary is then assumed to increase in line with wage inflation. In any future periods where you enter a period of part-time employment, your salary is reduced pro-rata.
Tax calculations allow for Personal Income Tax rates, the Medicare Levy, the Low Income Tax Offset and the Senior Australian Tax Offset. Threshold and Offset amounts in the first year are based on current rates. Thereafter they are assumed to increase in line with wage inflation.
The calculator assumes that your employer makes superannuation guarantee contributions on your behalf.
Superannuation guarantee contribution rates are:
Superannuation guarantee contributions are subject to the maximum contribution base, which is currently $62,270 per quarter (for the 2023/24 financial year). This threshold is assumed to increase in line with wage inflation.
Voluntary member contributions
The calculator enables you to enter regular voluntary concessional or non-concessional contributions. Voluntary contribution amounts 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.
The calculator also enables you to make a one-off non-concessional contribution. The amount you enter as a one-off contribution is assumed to be fixed, and is not indexed.
Concessional contributions up to $27,500 pa are taxed at 15%. Concessional contributions in excess of the contribution threshold are subject to additional tax. This is levied in the income tax environment, and so has no impact on the estimates in this calculator; however it would increase the amount of income tax you would have to pay.
High income earners (those who earn over $250,000 p.a.) are subject to additional tax on concessional contributions. These individuals will pay an additional 15% contributions tax on contributions relating to income above the $250,000 threshold. The calculator assumes that this additional tax is deducted from the superannuation balance; however there is also the option to pay this tax directly to the ATO.
Non-concessional contributions up to $110,000 pa, or $330,000 over three years (by taking advantage of the “bring-forward” rule) are not taxed. Non-concessional contributions in excess of these thresholds are taxed at the highest marginal income tax rate. There is also an option to withdraw the excess contributions, though this option is not considered for the purpose of this calculator. From 1 July 2021, non-concessional contributions are only permitted if the balance of an individual’s superannuation is below $1.7m. In a situation where the projected balance exceeds the (indexed) cap in the future, the calculator will not allow for any subsequent non-concessional contributions.
The Concessional and Non-Concessional contribution thresholds are indexed in line with the assumed rate of wage inflation.
In each projection year, your eligibility for a Government Co-Contribution is assessed based on your salary and non-concessional contributions.
The Co-Contribution thresholds and maximum amount are indexed in line with wage inflation.
In each projection year, your eligibility for a Low Income Superannuation Tax Offset is assessed based on your salary and concessional contributions.
The LISTO income threshold and maximum benefit are indexed in line with wage inflation.
The default investment return and fee assumptions are:
| ||Pension phase return (tax free)||Accumulation phase return (after-tax)||Investment fees and costs (%pa)|
(0% growth assets)
|Low to medium growth|
(20-40% growth assets)
(41-59% growth assets)
|Medium to high growth|
(60-76% growth assets)
(77-90% growth assets)
|High to very high growth|
(91-100% growth assets)
The categories of investments are based upon their exposure to growth assets.
Investment earnings in Accumulation and Transition to Retirement pension accounts are the assumed investment earnings and are net of (have been discounted for) 15% tax. Investment earnings in post-retirement pension accounts are tax-free and, therefore, no tax applies to these assumed earnings. The above returns are net of asset-based investment fees and costs.
The investment earnings for the Low Growth (0% growth assets) category are based on the average annual 10-year return of the Bloomberg Ausbond Bank Bill Index. Investment earnings for all other categories are based on the historical average annual 10-year CPI rate to March 2023 of 2.46% plus a target performance objective for investment categories with a corresponding growth asset profile over 10 years. Investment earnings are rounded to one decimal point. Investment earnings may vary as past performance is not indicative of future performance.
The investment fees and costs are representative of Legal Super annual fees and costs charged by investments with corresponding growth asset exposure as at 30 April 2023.
Note: If you choose to include your spouse’s details in the Retirement forecaster, your spouse is assumed to be invested in the same investment option as you.
Administration fees and insurance premiums
The default administration fees and insurance premiums are:
|Administration fee (per annum)||$68 per annum|
|Group Life Insurance premiums||$407 per annum|
The dollar-based administration fee and the annual insurance premium are assumed to increase in line with wage inflation. The Administration fee uses the Legal Super fee as at 1 April 2023 rounded to the nearest dollar. Group life insurance premium is based on fixed cover of $250,000 for a male aged 40 with no pre-existing conditions, as at 1 April 2023 rounded to the nearest dollar. You cannot adjust these two assumptions, even if you do not pay group life insurance premiums.
Excluded fees and costs
The calculator does not factor in the following fees and costs into the assumptions:
- any activity fee;
- salary continuance insurance premiums;
- any group life insurance premiums that may exceed the amount of $407 per annum.
If you enter a current age less than 67, the default retirement age is 67. If you enter a current age of 67 or older, the default retirement age is your age at your next birthday.
This approach is consistent with ASIC Corporations (Superannuation Calculators and Retirement Estimates) Instrument 2022/603.
The calculator provides an indicator of your life expectancy. The 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 2006-2101'.
Note: If you choose to include your spouse’s details in the Retirement forecaster, the life expectancy will continue to be based on the primary user’s life expectancy.
The calculator estimates your age pension entitlement.
The full rate of age pension and associated supplements are initially set to the current rates; detailed on https://www.humanservices.gov.au/individuals/services/centrelink/age-pension. The full rate of payment is indexed each year in line with wage inflation.
Age pension eligibility is subject to an asset test and an income test. Asset and income test thresholds are initially set to their current levels, and are indexed each year in line with price inflation.
The asset test is based on the accrued balance of superannuation assets and other assets.
Centrelink assess income for income test purposes in a number of ways. For example, any actual rent received on investment properties is included in assessable income. However interest or dividend income received on financial investments is not included directly. Rather 'deemed' income is calculated on financial investments and used for the age pension income test.
For the purpose of this calculator, this distinction is not made. Rather, deemed income is calculated on superannuation and all assets outside of superannuation, and age pension eligibility is calculated based on this deemed income.
Transition to retirement
The transition to retirement calculation:
- assumes that you continue working at the same rate
- assumes that you make additional salary sacrifice contributions and draw a pension such that your net income remains constant
- calculates the contribution and drawing level which maximises the benefit within the superannuation environment.
Transfer balance cap
The transfer balance cap restricts the amount that can be transferred into an account-based pension. At 30 September 2023 the cap is $1.9m and will increase in $100,000 increments in line with price inflation. If at the time of retirement your projected account balance exceeds the (indexed) transfer balance cap, the maximum possible amount will be transferred into an account-based pension and any excess balance will be retained in an accumulation account.
The drawings from superannuation in retirement are calculated as: Target income (which you are able to specify) less other income (which you are able to specify) less any age pension amounts (as calculated by the calculator).
Where the transfer balance cap is exceeded at the time of retirement, in retirement you will have both an accumulation account and a pension account. The minimum required amount will be drawn from the pension account and any further income required to attain your target income will be drawn from their accumulation account.
There are statutory minimum superannuation drawings in both the transition to retirement (TTR) phase and in retirement (once funds have been converted to the pension phase). For the purpose of this projection, this minimum is effectively ignored in the TTR phase, on the basis that any excess drawings could be re-contributed as non-concessional contributions.
A number of assumptions in this calculator are prescribed by legislation. These assumptions include: superannuation guarantee contribution rates; the tax arrangements on superannuation contributions, investment earnings and drawings; co-contributions; age pension payment rates and thresholds; income tax rates; and transition to retirement arrangements.
Where there is relevant legislation, the assumptions made in this calculator reflect current legislative arrangements. One uncertainty regarding future superannuation entitlement relates to possible future legislative changes.
Although some future changes in the legislation relating to superannuation are likely, it is not possible to know what these changes may be.
Updates to legislative assumptions are made as soon as practicable after such changes are announced. The calculator is based on legislative arrangements as of 30 September 2023.
For further information, please read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) available at https://www.legalsuper.com.au/publications.
Legal Super Pty Ltd ABN 37 004 455 789 is the Trustee of legalsuper ABN 60 346 078 879 and holds Australian Financial Services Licence No. 246315 under the Corporations Act 2001.
Legal Super Pty Ltd is licensed to deal in, and advise on, superannuation products in legalsuper.
This information is general information only and should not be considered to be personal advice. You are encouraged to obtain personal advice from a licensed financial planner or other adviser before making decisions based on this information. Past performance is not indicative of future performance.
Last updated: 30 September 2023