Income Stream calculator...




... loading calculator, please wait ...

 
Assumptions...
  1. The minimum amount to purchase an Income Stream is $30,000.
  2. The Income Stream is purchased with rollover monies from a complying super fund.
  3. No allowance has been made for taxation (including tax payable when purchasing the income stream or receiving the income stream amounts). This means that the summarised income stream amounts shown on steps 3 and 4 may be overstated. Super entitlements rolled over from Super SA or other government super schemes operating in an untaxed environment will have 15% contributions tax deducted from the taxable (untaxed) component. Amounts above $1,445,000 will be taxed at the highest marginal tax rate.
  4. No allowance has been made for the surcharge that may be deducted from the income stream account for any unpaid surcharge liabilities incurred before 1 July 2007.
  5. No allowance has been made for government benefits other than the Centrelink Age Pension. If these income sources apply, the results will not give a true reflection of the longevity of the income stream recipient's resources in retirement.
  6. The calculator assumes that the date set on your computer is correct. Projections are started from this date.
  7. Income stream payments for the first year are proportioned from the period of the commencement date to the following 1 July.
  8. The default price inflation rate/consumer price index (CPI) used is 2.5%. This rate has been based on historical and expected future rates and is the mid-point of the RBA target range for inflation. The actual rate of price inflation may differ significantly from this assumption.
  9. The default inflation rate is based on a salary inflation rate of 3.5%.This rate is consistent with the rate given in ASIC class order [CO 11/1227]. The actual rate of inflation may differ significantly from this assumption. You may change the default rate to see the effect that this may have.
  10. Income stream accounts increase each year with investment earnings (net of tax) at a default rate of 6.1% p.a. This is equivalent to the Super SA Income Stream Balanced investment option target investment rate. This rate will change if you choose a different investment choice. Risk and return of the eight Super SA Income Stream investment options are:
  11.  
    Investment options
     
    Target rate of return
     
    Investment time horizon
     
    Risk of negative return
    Cash CPI 0+ years On average less than 0.5 years in 20
    Capital Defensive CPI + 1.5% 2+ years On average between 0.5 to one year in 20
    Conservative CPI + 2.0% 4+ years On average one to two years in 20
    Moderate CPI + 3.0% 6+ years On average two to three years in 20
    Balanced CPI + 3.5% 7+ years On average three to four years in 20
    Growth CPI + 4.0% 8+ years On average three to four years in 20
    Socially Responsible The Socially Responsible option is structured to provide investors with risk and return characteristics likely to be similar to that of a growth fund. The risk of a negative return is on average four to six years in 20.
    High Growth CPI + 4.5% 10+ years On average four to six years in 20
  12. Interest is calculated and compounded, and yearly income is indexed, at 1 July each year. This means the first year income is proportioned if the start date is not 1 July.
  13. The required income in retirement (RIIR) is indexed to price inflation
  14. The RIIR is default to the 'Comfortable lifestyle' (ASFA Retirement Standard - March quarter 2017). The amount is made up of the following income (in order):
    1. minimum member income stream
    2. partner employment income (if the partner is not yet retired)
    3. partner minimum income stream (if the partner is retired)
    4. age pension (at single or couple rate as appropriate and for one individual or two if the partner is also retired) based on
      1. income test allowing for
        1. minimum income stream (member as well as partner if appropriate)
        2. partner employment income
        3. deemed income on financial non-superannuation assets
        4. personal assets
      2. assets test allowing for
        1. member allocated pension account balance
        2. partner allocated pension account balance (if retired)
        3. non-superannuation assets
    5. consumption (draw down) of non-superannuation assets
    6. income stream increased above the minimum (the increase being apportioned between member and partner, if there is one, based on account balance) with this potentially reducing the age pension (as the higher income might change the result of the income test).
    Note that there is no provision for owner occupied housing to be "consumed" in retirement.
  15. The 'Comfortable lifestyle' and 'Modest lifestyle' benefits are based on a survey by ASFA Retirement Standard (March quarter 2017) stating that the total annual income needed to fund a comfortable retirement is $43,665 p.a. (single)/$59,971 p.a. (couple) and a modest retirement is $24,250 p.a. (single)/$34,855 p.a. (couple).
  16. These calculations make no allowance for the effect of an account-based pension continuing to a surviving spouse on the death of the member.
  17. These calculations make no allowance for any entry fees, service fees, administration fees or switching fees deducted from your pension account.
  18. Centrelink Age Pension rules effective from 1 January 2017 have been applied to this calculator. The Government has increased the assets test limit to qualify for a full pension. The Centrelink Age Pension will be reduced by $3 per fortnight for every $1,000 of assets you own over the full pension limit.
  19. The Age Pension will increase with a default AWOTE (Average Weekly Ordinary Time Earnings) rate of 3.5% p.a.
  20. The Age Pension applies if the assets test and the income test applied to this calculator do not exceed the maximum thresholds.
  21. If a partner is selected, the Age Pension entitlements are assessed as a couple.
  22. The income test is based on all income derived from:
    1. Account-based income stream
    2. Partner's account-based income stream
    3. Income from personal and financial assets outside super
    4. Deemed income from financial investment assets.
  23. Deemed income from financial investment assets is calculated using the current deeming rates rules. You can find further details about deeming rates here
  24. The asset test is based on the following assets:
    1. Account-based income stream account balance
    2. Partner's account-based income stream account balance
    3. Personal assets (eg personal belongings)
    4. Financial investment assets (eg bank account, shares)
    5. Non-financial investment assets (eg rental property)
  25. The income test and asset test thresholds are increased with CPI.
  26. Income and capital appreciation (growth) rates for assets outside super
    1. The capital appreciation rate has a default value of 2.5% and a default income rate of 3%. Assuming a greater proportion of asset will be held in cash and term deposits, the total investment return is less than the balanced option.
    2. For personal assets, the capital appreciation rate has a default value of 2.5%. This is effectively an assumption that the member will maintain such assets at their current value perhaps by occasional replacement.
    3. The most likely non-financial investment asset (other financial assets) for a member in the retirement phase is an investment property where any debt has been repaid. The same default assumptions as for financial investment assets have been adopted.
  27. An allowance is made for Deductible Amount which has been calculated as the balance of the account-based income stream at retirement, divided by the life expectancy.
  28. No allowance has been made for deductible amounts for partners who have already retired.
  29. Should the income from these sources be less than the RIIR, then the deficit is obtained by proportionally increasing the pension from the account-based income stream and the pension from the partner's account-based income stream.
  30. This calculator estimates an amount payable at a future time and has been adjusted to include inflation to assume changes in the cost of living. The inflation and investment rates are fixed for the term of the calculation. In the real world this is not the case, inflation and investment rates fluctuate.
  31. These calculations do not make any allowance for payment of the income stream to a reversionary pensioner.
  32. The administration fee defaults to 0.3% per annum of assets held in the Income Stream. The minimum administration fee for the income stream account is $120 p.a. and the maximum administration fee for the income stream account is $700 p.a. This is equivalent to the administration fee for the Super SA Income Stream.
  33. There are no upfront fees or levies deducted from the income stream.
  34. Partner's Balance is shown in today's dollars using the price index as the deflator.
  35. The results displayed by this calculator for the 'Balance' columns are calculated in today's dollars using the price index as the deflator.
  36. The default life expectancy is based on Australian Life Tables 2010-2012.
  37. No allowance has been made for existing or transition to retirement income streams (ie non-commutable income streams).
  38. No allowance has been made for the minimum account balance of $1,500 that is required in the Super SA Income Stream.
  39. If the income stream payment is less than the balance of the Income Stream account, then the balance will be paid out.
  40. The calculations are a general illustration of an income stream based on our current understanding. It should only be used as a guide for future years as the legislation may change.
  41. The assumptions used in this calculator are based on the rules of the relevant product, the applicable legislative schemes including current tax legislation, appropriately determined rates of return and inflation and are therefore considered reasonable for the purposes of working out the estimate.
  42. If you have a partner and have not included them in the calculation it could have implications for your Centrelink Age Pension estimate.
If your actual situation differs from the assumptions made, then the calculations may differ from your actual amounts.

Assumptions used for your partner's 'before' retirement projection...

  1. Gross salary is increased with a default inflation rate of 3.5% p.a.
  2. Employer (concessional) contributions are assumed to be not less than the minimum amount to which you are entitled under Superannuation Guarantee legislation and are subject to 15% contributions tax. No allowance has been made for the maximum superannuation contribution base ($52,760 per quarter for the 2017/18 financial year).
  3. Salary sacrifice and other employer concessional contributions are limited to 100% of gross salary for superannuation purposes, whereas after tax (non-concessional) contributions are only limited by the contributions cap.
  4. The super account increases accounts increase each year with investment earnings (net of tax) at a default rate of 6.1% p.a. This is equivalent to the Super SA Income Stream Balanced investment option target investment rate. This rate will change if you choose a different investment choice. Risk and return of the eight Super SA Income Stream investment options are:
  5.  
    Investment options
     
    Target rate of return
     
    Investment time horizon
     
    Risk of negative return
    Cash CPI 0+ years On average less than 0.5 years in 20
    Capital Defensive CPI + 1.5% 2+ years On average between 0.5 to one year in 20
    Conservative CPI + 2.0% 4+ years On average one to two years in 20
    Moderate CPI + 3.0% 6+ years On average two to three years in 20
    Balanced CPI + 3.5% 7+ years On average three to four years in 20
    Growth CPI + 4.0% 8+ years On average three to four years in 20
    Socially Responsible The Socially Responsible option is structured to provide investors with risk and return characteristics likely to be similar to that of a growth fund. The risk of a negative return is on average four to six years in 20.
    High Growth CPI + 4.5% 10+ years On average four to six years in 20
  6. A default amount of $1.35 per week is provided for 'Fees'. You may change the default amounts to see the effect that this may have. The actual fees deducted from your investment may differ significantly from these assumptions. These default rates are the average fees from our range of products.
  7. A default amount of $1.50 per week is provided for 'Insurance premiums' as an average premium for someone in an industry super fund. You may change the default amount to see the effect that this may have. The actual insurance premiums deducted and the impact on your investment may differ significantly from this assumption. Insurance premiums vary significantly between individuals and it is recommended you enter an amount that is being deducted from your current account.
  8. Government co-contribution has been included in the calculation. This has been based on the gross salary and after tax contributions that have been entered into the calculator.
  9. The super co-contribution lower income limit for the purposes of the projection is increased with a default salary inflation rate of 3.5% p.a. The actual rate of inflation may differ significantly from this assumption. You may change the default rate to see the effect that this may have.
  10. An allowance for the low income superannuation tax offset (LISTO) has been included in this calculator. The LISTO salary threshold is indexed with a default salary inflation rate of 3.5% p.a. The actual rate of inflation may differ significantly from this assumption. You may change the default rate to see the effect that this may have.
  11. Concessional (pre-tax and Superannuation Guarantee) contributions are capped at a maximum of $25,000 and indexed (increments of $2,500). After-tax contributions are capped at a maximum of four times the concessional contributions limit (currently $25,000) in the projection of the account balance.
  12. No allowance has been made for the Bring-forward provision for people under 65 years old. Find out more here.
  13. No allowance has been made for Government benefits or other income sources prior to retirement with the exception of the Government super co-contribution. If any of these other income sources apply before retirement, the calculator's results will not give a true reflection of the longevity of your own resources in retirement.
  14. No allowance has been made for spouse contributions.
  15. If the partner's benefit at retirement is greater than the transfer balance cap (currently $1.6M), any excess is treated as a financial investment asset.