This is a stochastic calculator – A stochastic simulation model allows for the uncertain nature of future experience by modelling, in this case, 1,000 possible sets of future investment returns and inflation over time and the impact this would have on your retirement outcomes. The results displayed represent the likelihood of your choice of a projected outcome from the distribution of possible future outcomes and as such do not represent any one particular outcome and are not a guarantee of a future outcome. The calculator uses assumptions, including for inflation, wage growth and investment returns, that are provided by and recommended by Towers Watson Australia Pty Ltd ABN 45 002 415 349 (WTW), global actuarial consultants. Relying on the recommendation of WTW, the Trustee considers the assumptions are reasonable in relation to the operation of this stochastic calculator because they allow for a reasonable range of potential outcomes when projecting your future financial position.

If you are an existing member of TelstraSuper, log into SuperOnline and access the Retirement Lifestyle Planner. With your consent, the calculator may pre-fill some inputs to save you time and personalise your experience. We recommend you review these pre-filled inputs to ensure they are an accurate reflection of the circumstances you wish to model. You can update these inputs within the calculator screens and settings. The types of data pre-filled varies from member to member depending on the information known or previously inputted.

The pre-filled inputs may include:

• Account balance(s) and relevant investment option allocations
• Contributions over the past 12 months
• Insurance premiums over the past 12 months
• Your age, gender and marital status
• Partner age, balance(s) and relevant investment option allocations
• Salary and partner’s salary
• Other investment balance(s), other income, investment property balance and rental yield
• Household spending level
• Lifestyle spending goals
• Career break or career change plans
• Desired retirement income
• Planned future lump sum contributions/expected inheritance
• Planned future income preferences (lifetime pension and account-based pension)

Government Age Pension

By default, the calculator assumes you are eligible for a Government Age Pension and includes it in your retirement income projection. This was considered reasonable to illustrate the potential of Government Age Pension income supplementing income from your superannuation in retirement.

Using the settings and assumptions, you can choose to exclude a Government Age Pension in the calculation of your retirement income.

If you choose not to exclude it or accept the default of including it, this calculator will produce an estimate based on the Services Australia income and assets tests, our assumptions, and the information you provide. Specific information includes:

• If you choose to include your partner's details in the projection, the calculator applies the Services Australia couple’s income and assets tests and payment rates.
• As a default, the calculator assumes you have $25,000 of personal assets (car, furniture, etc.), no investment assets (including no investment property), and no other income. You can input these figures as totals.
• To calculate an estimate of Government Age Pension to include in your retirement income (and that of your partner where applicable), the calculator takes into account:
  • in applying the assets test, the information you input about the value of personal assets, financial investments, investment properties and superannuation accounts, and if you include a lifetime pension, then 60% of the investment amount is included as an asset, and 60% of the payments are included as income. From age 84, only 30% of the investment amount is included as an asset.
  • in applying the income test, the investment income deemed to be earned on superannuation accounts and financial assets (excluding an investment property) based on deeming rules, plus projected income on actual rental amount entered for an investment property, plus, if you have modelled a lifetime pension, then 60% of the income from that, plus any other income you input.

Please note, the assets test and income test estimates may vary from your actual position when Services Australia applies them because Services Australia applies a more detailed calculation. Your personal circumstances may exclude you from eligibility for a Government Age Pension and this may result in a variance from your actual outcome compared to the calculator illustration.

Retirement Planning Certainty

The stochastic simulation model used in this calculator allows for the uncertain nature of future experience by modelling, in this case, 1,000 possible sets of the Consumer Price Index (price inflation) (with a mean of 2.6% pa and standard deviation of 2.2% pa) and wage inflation (with a mean of 3.6% pa and standard deviation of 3.2% pa) and investment returns which are updated annually. The most recent figures used in these calculations are from June 2023.

A limitation of a stochastic approach is that you are unable to input a specific assumption for price inflation, wage inflation or investment return amount as the model incorporates 1,000 sets of possible future year-by-year outcomes for these assumptions. The stochastic model produces 1,000 projections of your future financial position. For ease of use, the calculator allows you to choose from three easy to use options regarding retirement planning certainty of your projected future position based on the range of outcomes of price inflation, wage inflation and investment returns.

The three options are: “Very Highly Likely”, “Highly Likely” and “Moderately Likely”. The default likelihood assumption used by the calculator is “Highly likely”, which is an 80% confidence level and is the midpoint of the retirement planning certainty options. The trustee considers this the most reasonable as it illustrates the middle of the alternative options. Should the future price inflation, wage inflation or investment return rates differ significantly from the simulations used, this may result in a variance between the estimate calculated and your actual financial outcome.

Price inflation rates are used to inflate the following legislative factors over the period of the projection:

• Government Age Pension assets test threshold
• Government Age Pension income test threshold
• Deemed income asset threshold
• Transfer Balance Cap (increases only applied in $100,000 increments)

Wage inflation rates are used to inflate the following variables over the period of the projection:

• Your (and your partner’s if applicable) salary
• Your contributions to super
• Your drawdowns / retirement income level
• Your ‘lump sum withdrawals’ in retirement
• The value of your personal assets, investment property value, and other income
• Dollar based administration fees and insurance premiums
• Government Age Pension payment rate
• 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

Time Value of Money

The Retirement Lifestyle Planner presents the results in today’s dollars.

For the purpose of displaying the results in the tool, all future amounts are converted to today’s dollar value, including your projected superannuation balance at the date of retirement and the income amounts you will receive in retirement. This means the amounts are adjusted for inflation utilising a stochastic approach.

ASIC’s guidance to calculator providers who provide calculator tools in compliance with ASIC (Superannuation Calculators and Retirement Estimates) Instrument 2022/603 is that projection-based calculators must present future results in today’s dollars. When an amount is expressed in today’s dollars, it means the result has been adjusted for the rising cost of living and increases in living standards. The calculator uses wage inflation as a reasonable basis for estimating the rise in the cost of living and increases in living standards.

Showing results in today’s dollars allows you to make a meaningful comparison with current wage levels and prices. If results were shown in “future dollars” instead, they would be larger. “Future dollars” refers to the time value of money where $100 of goods and services in today’s dollars is likely to cost more ten years in the future. For example, if you enter a retirement spending amount of $50,000 pa, the projection assumes that you will increase this level of retirement spending in line with price inflation to keep pace with the rising cost of living and increases in living standards.

Administration Fees

The calculator assumes the following Administration fees apply to the calculation of your superannuation and retirement balances. The Trustee considers this a reasonable assumption as it expects most users of the calculator will be TelstraSuper members. The administration fees used by the calculator can be changed in the ‘Settings’ page to suit your circumstances.

	Account-Based Pension Account	Accumulation Account
Administration fee ($1 per week)	$52 per annum	$52 per annum
Administration fee (% of balance)	0.17% per annum 0.16% per annum from 1 April 2024	0.17% per annum 0.16% per annum from 1 April 2024
Administration fee cap	$1,752 per annum (includes both rows above) $1,652 per annum from 1 April 2024 (includes both rows above)	$1,752 per annum (includes both rows above) $1,652 per annum from 1 April 2024 (includes both rows above)

 

Insurance Premiums

The calculator assumes a default annual insurance premium amount of $637. Users can change this input field between a range of $0 and a maximum of $10,000 per annum. Insurance premiums are only applied in the calculation to retirement age (default is 67 or custom input age) and are not applied in the retirement phase. The default insurance premium amount of $637 p.a. represents an approximate insurance cost for $200,000 of Life and Total and Permanent Disablement for a 50-year-old, female, white collar worker on a salary of $100,000 p.a. Insurance premiums can significantly vary based on your circumstances and needs and you can input the Insurance Premium amount you wish to model using the input field on the Settings page.

Lifetime Pension — The Lifetime Pension illustration has a very simplistic approach. Financial products may exist that have a more extensive range of features and benefits; however, this calculator is not linked to any one specific financial product. As such, the income illustration produced by the calculator is an illustration only and is not a guarantee of return. The features below can be updated by the user to explore various scenarios specifically related to a Lifetime Pension.

Immediate versus Deferred Income – the design of the tool is limited to illustrating Lifetime Pensions with immediate payments only. Should you wish to explore deferred payments in a Lifetime Pension, we recommend you speak with a financial planner who can provide you with specific financial product advice.

Investment Exposure – the design of the tool is limited to projecting only Income Certainty or Market Linked outcomes. Income Certainty is a set payment rate that can be linked with the Consumer Price Index (CPI) or the Reserve Bank of Australia (RBA) cash rate. Market Linked is a payment rate that moves with changes in traditional investment markets such as Australian listed securities. The default assumption is the Income Certainty option as it is a conservative illustration and has a 100% defensive Asset Allocation. Users can still explore Market-Linked options with variable payment rates and varying levels of Asset Allocation mixes.

Indexation – the list of options (no indexation, CPI indexed, RBA cash rate) only applies to the Income Certainty option of the Investment Exposure feature. The default assumption used is CPI indexed as it is reasonable for users to maintain their current lifestyle or a specific lifestyle they wish to model which remains consistent throughout the length of the modelled period.

Investment choice – the list of options (Growth, Balanced, Conservative Balanced, Conservative and Cash) only applies to the Market Linked option of the Investment Exposure feature. The default assumption used is Conservative Balanced as this is a reasonable balance between growth and conservative investments.

Survivor benefit – you can choose to toggle between having a Lifetime Pension revert to your spouse upon your death or not. If no partner is selected, the calculator defaults to a Lifetime Pension that does not revert to your spouse also known as a ‘non-reversionary’ Lifetime Pension.

The default assumption is that 100% of the Lifetime Pension reverts to your spouse upon death. This was considered reasonable to ensure that in a couple scenario, the Lifetime Pension income lasted till the longer of the two spouses.

Maximum withdrawal value illustration – At the time of commencement of your modelled Lifetime Pension, the maximum withdrawal value equals 100% of your investment amount and reduces to zero over the withdrawal period. The withdrawal period is set based on a table of life expectancies published by the Government.

Asset Allocation: Should you choose to model the Market-Linked Lifetime Pension, the following Growth/Defensive Asset Allocations are applied to the Lifetime Pension component when illustrating the Asset Allocation impact from moving funds from an Account-Based Pension to a Lifetime Pension:

Market-Linked Lifetime Pension Option Name	Growth Asset Allocation	Defensive Asset Allocation
Growth	85%	15%
Balanced	65%	35%
Conservative Balanced	50%	50%
Conservative	30%	70%
Cash	0%	100%

The following Growth/Defensive Asset Allocations apply to the Account-Based Pension investment risk allocation:

Investment Option Name	Growth Asset Allocation	Defensive Asset Allocation
High Growth	90%	10%
Growth	83%	17%
Balanced	69%	31%
Moderate	53%	47%
Conservative	31%	69%
Cash	0%	100%
Diversified Bonds & Credit	0%	100%
Property	58%	42%
Australian Shares	100%	0%
International Shares	100%	0%

Lifetime Pension indexation approach —The following table provides some details about the projected Lifetime Pension indexation rates used by the stochastic modelling to calculate the projected lifetime income payment rates. Whilst the calculator is product-agnostic, the indexation rates illustrated below have been based on the asset allocations used by Challenger Life Company Limited (ABN 44 072 486 938) (AFSL 234670) (CLC).

The income in your modelled Lifetime Pension is based on pricing tables provided by Challenger Life Company Limited (ABN 44 072 486 938) (AFSL 234670) (CLC) and are only for the purposes of illustration rather than a guarantee of outcome. These pricing tables incorporate the investment returns expected by CLC. Various Lifetime Pension product providers may provide different income quotations depending on market conditions. Users modelling Market-Linked Lifetime Pensions should understand that payment rates may fluctuate based on market conditions for the investment option chosen.

Indexation Rate	Mean of annual indexation	Standard Deviation of annual indexation
Market-Linked Growth	8.36%	14.13%
Market-Linked Balanced	7.52%	10.89%
Market-Linked Conservative Balanced	6.83%	8.45%
Market-Linked Conservative	5.98%	5.45%
Market-Linked Cash	4.32%	1.08%
RBA Cash	4.32%	1.08%
CPI	2.55%	2.25%

 

The illustrations of your projected superannuation balance and retirement income are based on 1,000 sets of simulated rates of investment returns associated with the investment risk level you have selected. The default assumption is a Balanced investment portfolio, but you can explore eleven different investment risk levels. The Trustee considers the Balanced investment portfolio is a reasonable default assumption as it is a midpoint on the investment risk scale.

For existing TelstraSuper members who login through SuperOnline and consent to their information pre-filling into the calculator, the default is the existing investment options held by the TelstraSuper member. This is classified as ‘My Current’. Please note, if you save a custom investment option mix while using this calculator, this will become your new ‘My Current’ position for this scenario. Starting a new scenario will revert your ‘My Current’ position to your existing investment options until you choose to model a new custom mix.

The following table provides some details about the projected investment returns used by the stochastic modelling to calculate amounts for balances held in your Account-Based Pension account in your retirement phase and balances held in your accumulation account (if any). Whilst the calculator is product agnostic, the expected returns illustrated below have been based on the historic performance and strategic asset allocation of TelstraSuper’s investment options. The Trustee considers this a reasonable assumption as it expects the majority of users of the calculator will be TelstraSuper members.

The table below illustrates the eleven Investment Risk Levels you can model in the calculator and the rates used:

Investment Risk Level	Account Based Pension Account		Accumulation Account
	Mean Annual Return	Standard Deviation of Annual Return	Mean Annual Return	Standard Deviation of Annual Return
High Growth	10.04%	14.15%	8.79%	12.71%
Growth	9.67%	11.82%	8.50%	11.29%
Balanced	9.16%	10.36%	7.86%	9.34%
Moderate	8.36%	8.02%	7.13%	7.12%
Conservative	7.17%	5.28%	6.08%	4.45%
Cash	4.32%	1.08%	3.67%	0.92%
Diversified Bonds and Credit	5.72%	4.49%	4.86%	3.82%
Property	8.36%	10.46%	7.23%	9.05%
Australian Shares	11.04%	19.94%	9.49%	18.01%
International Shares	10.18%	17.74%	9.02%	15.86%
MySuper	*	*	*	*

*The MySuper investment risk option utilises the ‘Growth’ rates of return for users under the age of 50, ‘Balanced’ rates of return for users aged 50 to under 65, ‘Moderate’ rates of return for users aged 65 to under 70 and ‘Conservative’ rates of return for users aged 70 and over.

*The MySuper investment option is not available to already retired users.

• The underlying simulated returns for each investment option have been determined based on advice and modelling received from Towers Watson Australia Pty Ltd ABN 45 002 415 349 on 7 June 2023.
• Investment return characteristics shown above are net of applicable investment tax and investment fees (separate to administration fees).
• Past performance is not a reliable indicator of future performance because actual returns may vary significantly from year to year and could be negative in some years, particularly for investment allocations to growth assets, such as shares and property.

The calculator also allows you to model other investment assets, specifically investments held outside of superannuation as either Cash or Shares/Managed Funds. The summary statistics of the simulated investment returns applicable to these investments are as follows.

Investment type	Mean of annual return	Standard Deviation of annual return
Cash	4.32%	1.08%
Shared / Managed funds	11.04%	19.94%

The calculator assumes that your employer contributes the default Superannuation Guarantee (SG) rate, or the Employer Super contribution rate you input, as a percentage of your salary. The calculator assumes that 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. 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.

The annual income 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 your actual outcomes may be different to the results of the projection, depending on how high your salary increases in the projection period.

The calculator limits before tax contributions in each financial year, including the salary sacrifice contributions you input, so you do not exceed the concessional contributions cap (which applies to the total of your employer contributions and before tax contributions). This assumption is reasonable as many employers will limit their contributions to the concessional contributions cap, but if your employer does not do this, then your actual outcomes may be different to the results of the projection, depending on the actual amount of your before-tax contributions in the projection period.

The calculator will not allow you to input additional regular contributions greater than your salary or the concessional contributions cap, but you can enter non-concessional (after tax) contributions. For the 2023-2024 financial year, the concessional contribution cap was $27,500 for all individuals. The calculator assumes this will continue to be the cap for the projection period. Please note that should the Government decide to change the future concessional contribution cap, this would be one change which would make the projection differ from your actual outcome.

The calculator will not allow you to input additional regular contributions greater than your salary or the non-concessional contributions cap, but you can enter non-concessional (after tax) contributions. The calculator assumes the non-concessional contributions cap will continue to be set at four times the concessional cap, and 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 (see below) at any year in the projection, the calculator limits your projected non-concessional contributions to zero for that year.

The calculator also allows you to enter expected future one-off contributions and the age at which you expect to make/receive these amounts. The amounts inputted are limited to the Bring Forward limit for non-concessional contributions to superannuation and are assumed to be contributed to your accumulation account at the time they are made or received.

The calculator assumes that you are eligible for the government co-contribution if you make after-tax contributions, including that your income is below the relevant government threshold, and that you are under age 71 at the end of the financial year in which you make the after-tax contributions. Eligibility for the government co-contribution is also subject to minimum working requirements and the calculator assumes that you meet these too. This is a reasonable assumption because most Australians who make after-tax contributions, satisfy the above criteria and are eligible to receive a 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 that are not input into the calculator may not be included in an estimate of total income. For the full definition of 'income' used by the ATO and other details on government co-contribution rules and limits, refer to the ATO website at www.ato.gov.au.

If you do not in fact meet the criteria required for eligibility, this may result in the calculator using a different tax position to your actual tax position. Please note that should you not qualify for the government co-contribution, this would be one change which would make the projection differ from your actual outcome.

The calculator allows you to enter expected future inheritance amounts and the age at which you expect to receive these amounts. The amounts inputted are assumed to be invested outside of super in a shares/managed fund investment.

The calculator assumes that you are eligible for a government low-income superannuation tax offset (LISTO) if you or your employer make before tax contributions for you, and your income is below the relevant government threshold. Eligibility for LISTO is also subject to age restrictions and minimum working requirements. This is reasonable as most Australians who satisfy these criteria would be eligible to receive a LISTO.

The total income used by the calculator to estimate if you qualify for a LISTO is equal to your salary before tax and before any salary sacrifice. 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.

If you do not in fact meet the criteria for eligibility, this may result in the calculator using a different tax position to your actual tax position. Please note that should you not qualify for the LISTO, this would be one change which would make the projection differ from your actual outcome.

Refer to the tax section below regarding exclusion of your personal taxation circumstances.

The Transfer Balance Cap is a cap on the amount of superannuation eligible to be transferred to account-based pensions and lifetime pensions in retirement. For the 2023-2024 financial year the Transfer Balance Cap is $1,900,000. This calculator assumes you have not previously set up an account-based pension or lifetime pension. If you have previously set up an account-based or lifetime pension, this may have a material impact on your Transfer Balance Cap, and your circumstances may vary from the projection provided.

We recommend you speak with a financial planner if you have specific Transfer Balance Cap circumstances you wish to discuss. Similarly, the Transfer Balance Cap can be subject to change by the government in future periods and this may have a material impact on your actual outcome compared to the projected retirement income calculated by the calculator. A limitation of this calculator is that the maximum combined account-based pension and lifetime pension is the projected Transfer Balance Cap at your chosen retirement age, or the current Transfer Balance Cap of $1,900,000 if you nominate that you are already retired. As 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 before retirement, the calculator assumes the same fees and returns applied before retirement will be applied to this superannuation account (if applicable) after retirement.

Including your partner (if any) will allow a better estimate of the Government Age Pension to be provided to you as a couple and, as a result, a better estimate of the future drawdowns that you and your partner (if any) need to make from super to meet your overall retirement income needs. Please note that it is a limitation of the calculator that it does not consider the transitional retirement income needs for couples that retire at different points in time. The desired retirement income goals are related only to the period from your nominated retirement age.

Life expectancy refers to the average number of additional years a person of a given age and sex could be expected to live, assuming current age-sex specific death rates are experienced throughout their lifetime. The life expectancy estimates shown in the calculator are 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.

After allowing for any Government Age Pension, lifetime pension, investment property income or other income you are projected to receive in retirement, the calculator determines the drawdowns from each super account and other investments required to achieve the desired target income in retirement. The calculator assumes that you and your partner (if any) drawdown your respective accounts/investments in proportion to your respective balance, subject to minimum drawdown requirements. This means if your super balance is above the Transfer Balance Cap, your desired target income will be subject to the minimum drawdown requirement, and thereafter the calculator will draw from your pension and accumulation accounts on a proportionate basis. 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 or capital gains tax that may be applicable on any drawdowns from other investments.

In illustrating pre-retirement income, the calculator utilises all sources of income (salary, investment property income, other income entered into the calculator) and applies the statutory taxation rates from the Australian Taxation Office inclusive of Medicare and low income tax offset. Sources of income illustrated in the calculator pre-retirement are shown net of estimated income tax.

In illustrating post-retirement income, the calculator does not apply any statutory rates, drawdowns from superannuation being the major income source after retirement are tax free after age 60.

The Retirement Lifestyle Planner is intended for accumulation account holders looking to get a projection of their superannuation balance at retirement and to gain an understanding of the amount of income they could have in retirement, and whether this is sufficient for the lifestyle they expect and what other strategies they could consider to improve this position. Other cohorts of users such as members who are already retired and drawing an account-based pension and young accumulators are able to access and use the calculator, however the tool design has not targeted these cohorts and there may be more suitable calculators available for these members to access.

The calculator does not guarantee any financial outcomes and the limitations are as follows:

• This calculator does not project Defined Benefit entitlements.
• This calculator is not appropriate for users who wish to project the future value of their direct investments such as direct shares on the ASX.
• This calculator is not appropriate for users interested in projecting out their Transition to Retirement (TTR) income strategy.
• The illustration provided by the calculator takes into account certain information you input, however it does not consider all your personal circumstances including your current lifestyle expenses, other financial commitments such as debt, or other financial circumstances or needs and objectives, which should be taken into consideration when providing comprehensive financial advice.
• The calculator will be updated regularly and in response to new legislation.
• This calculator allows the user to input an amount for ‘later retirement’ spending, but does not generally consider multiple changes to spending patterns in retirement.
• This calculator does not consider the sale of other investments to fund retirement that might otherwise delay the need to draw down super.
• This calculator does not consider the impact of any inheritance or other injection of funds or contributions in the future that are not inputted into the calculator.
• This calculator is not designed to provide advice on whether savings should be used to reduce any debt you have as opposed to increasing your retirement income.
• This calculator does not take into account, TelstraSuper product specific features such as:
  • the Cash allocation feature
  • the Automatic Investment Re-weight facility
  • any ‘bucket’ strategy that may have been previously advised on
• The calculator does not allow for circumstances where a member has a previously established an account-based pension or lifetime pension. The calculator provides a simplified age pension estimate, that may vary from your actual position when Services Australia applies the income and assets tests.
• A limitation of a stochastic approach is that you are unable to input a specific assumption for price inflation, wage inflation or investment return amount.
• This calculator does not consider the transitional retirement income needs for couples that retire at different points in time.

The calculator is able to be accessed on both desktop and mobile devices and is best viewed on a desktop computer. If using a device older than 4 years, then the features or functionality of the tool may be limited. Similarly, mobile devices with small screens may result in a sub-optimal user experience. The software used to access the calculator may also impact user experience. Browsers older than 1 version behind the current one may not be able to access the calculator.

The calculator uses relevant Commonwealth laws current as at December 2023 and is subject to change as relevant laws change.