Core Simulation Engine

The calculator uses a year-by-year simulation to project your financial future. Each year, it calculates your income, expenses, investment returns, and taxes to determine your financial position. This detailed approach allows for greater accuracy and the ability to model complex scenarios.

Superannuation Projection

Your superannuation balance is projected annually until your retirement age. The calculation for each year is as follows:

Ending Balance = (Starting Balance + Contributions) * (1 + Annual Return)

• Contributions: Includes employer contributions (Super Guarantee) and any voluntary contributions you make.
• Annual Return: Based on the "Super Annual Growth" assumption you provide.

Salary Package and Employer SG Method

Income can be entered as Salary excluding super or Total package including super. Salary excluding super treats the entered amount as cash salary and adds calculated employer SG. Total package including super keeps the package fixed, then calculates the cash salary left after employer SG.

Calculated cash salary = Total package including super - Employer SG

The standard SG calculation applies the configured SG rate and, by default, the maximum super contribution base. Employer SG override is only for modelling actual employer contributions when they differ from the calculated amount. Exports show calculated cash salary, employer SG, override status, concessional cap remaining, concessional cap warning, and Division 293 warning status.

Age Pension Calculation

The Age Pension eligibility is determined by two tests: the Assets Test and the Income Test. You will receive the lower pension amount calculated from these two tests.

Assets Test

Your pension is reduced if your assessable assets are above a certain threshold. The reduction is calculated as:

Pension Reduction (per fortnight) = (Your Assets - Asset Threshold) / 1000 * 3

Income Test

Your pension is reduced if your income from all sources (including deemed income from assets) is above a threshold.

Pension Reduction (per fortnight) = (Your Deemed Income - Income Threshold) * 0.5

Investment Returns & Dynamic Allocation

Investment returns are calculated based on your asset allocation. If you enable "Dynamic Allocation", your asset mix will automatically adjust as you age, typically becoming more conservative over time. The formula for the equity portion is based on your selected glide path rule (e.g., 110 - Age).

Equity % = Glide Path Rule(Your Age)

The remaining percentage is allocated to bonds and cash.

Healthcare & Aged Care Costs

Future healthcare costs are projected by inflating your current annual costs by the specified "Healthcare Inflation Rate". Aged care costs are factored in as a potential future liability, based on the probability, start age, duration, and annual cost you provide.

Expected Aged Care Cost = (Annual Cost * Duration) * Probability

Future Property, Windfall and Inheritance Assumptions

Future Home or Property Plan and Expected Future Windfall / Inheritance inputs are scenario-only by default. They do not improve the Core Projection unless you explicitly select Include in base projection.

Windfall and inheritance modelling is simplified. It is intended for rough planning only and does not model tax, legal, CGT, deceased-estate, trust, or super death-benefit rules.

On-Demand Analysis Tools

Core Projection runs the main projection and risk work. Suggestions & Action Plan, stress testing, overseas retirement, and retirement-age tools are run on demand. If inputs change after one of those tools has run, the tool output is marked for refresh rather than silently reused as current.

Monte Carlo Simulation

The Monte Carlo simulation runs your retirement plan thousands of times, each with a different sequence of random (but realistic) investment returns. This helps you understand the range of possible outcomes and the probability of success for your plan.