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These notes and assumptions should be read in conjunction with the calculator and videos.
Notes and assumptions for calculator
The calculator lets you test, or model, how your choices may affect you over the longer term. The calculator provides you with the flexibility of including your spouse’s super and any Government Age Pension entitlements.
It is important to remember the amounts projected are illustrations only and your actual results are not guaranteed in any way. Your actual future benefit amounts will vary depending on the actual contributions, investment returns, fees, insurance costs, your assets outside super and other external factors (such as tax and inflation).
It is recommended that you regularly update your projections. The calculator should not be relied on for making a decision about a particular product and we recommend you consider personalised financial advice before making financial decisions. Sunsuper also recommends you read our disclaimer.
The results are shown in "today's dollars" so they are consistent with today's living standards. For the period prior to your retirement age the discount rate is at 3.75% per annum. For the period after your retirement age the discount rate is equal to the rate of indexation of the pension payments. The default rate for the period after retirement age is 3.0% per annum.
Contributions and taxes
All regular contributions have been indexed annually at the salary increase rate set by you. The default rate is 3.75% per annum. Contributions have been assumed to be paid regularly during each year.
Contributions tax at a rate of 15% of employer contributions and salary sacrifice contributions has been included in the projections.
The limit for concessional contributions (employer and salary sacrifice contributions) for 2011/12 is $25,000, however transitional limit of $50,000 applies for people aged 50 and above until 30 June 2012. The limit for non-concessional contributions (personal contributions paid from after tax salary) for 2011/12 is $150,000 in a year or $450,000 averaged over 3 years. The contribution caps are indexed to AWOTE. Any additional tax on contributions above the limits has not been allowed for in the projections.
The Government co-contribution for eligible members has been included in the projections. The ATO can give you the most up to date information www.ato.gov.au/super. The amount of the Government co-contribution has been based on the nominated amount of after tax contributions and annual salary.
No allowance has been made for the application of the Superannuation Guarantee (SG) maximum threshold, any tax payable on the projected super benefit at your retirement age and any tax payable or rebates on the projected pension payments in retirement.
The calculator lets you model three different investment profiles – conservative, balanced and growth. The assumed pre-retirement investment returns per annum are 6.0% for Conservative, 7.0% for Balanced and 7.5% for Growth. These returns are after the deduction of investment fees and investment taxes and are used to calculate the projected super benefit to the retirement age.
For the period after the retirement age, the annual investment return has been adjusted to reflect the fact there is no investment tax within a superannuation fund on assets used to purchase retirement pensions. The annual investment return for the period after your selected retirement age is the annual investment return for the investment profile selected plus an adjustment of 0.6% per annum for the fact there is no investment tax.
Administration fees and insurance costs
For the period up to the retirement age, an administration fee of $1.25 per week, plus 0.05% per annum of your account balance has been included in the projections.
An insurance premium of equal to the Standard Premium (refer to the Sunsuper for life PDS) has been included in the projection for death and total and permanent disablement insurance. The deduction of the insurance premium ends at the retirement age. Your actual insurance costs may be higher or lower than the assumed insurance cost and this may impact on the projected benefit amounts.
For the period after the retirement age, an administration fee of $4.00 per week, plus 0.1% per annum of your pension account balance has been included in the projections.
Pension payments from the super account and Government age pension
It is important to remember the amounts projected are illustrations only and in particular your actual future Government Age Pension amount will vary depending on your circumstances including the value of your investments outside super.
The total pension payment in retirement (i.e. pension payments from the super accounts plus the Government age pension) has been indexed annually at the rate selected by you. The default rate is 3.0% per annum.
The minimum annual pension payment percentages from your super account can be found at www.ato.gov.au/super
The Government Age Pension rules are set by Parliament. The amount of the age pension and other thresholds are updated regularly and it is possible that this calculator may lag behind these adjustments. The most up to date information can be found at www.humanservices.gov.au.
The amount of the Government Age Pension has been indexed at 3.75% per annum. The asset test thresholds and the income test thresholds have been indexed at 3.0% per annum. The assets test is based on the projected amount of investment assets outside super, your projected super balance and personal assets of $50,000. The income test is based on the projected income from the projected investment assets outside super and your projected income from your super balance. Any investments outside super have been assumed to grow at 3.0% per annum and pay an annual income of 3.0% of the capital value. No allowance has been made for any tax payable on the capital value or income from any investments outside super.
Eligibility for the Government age pension for males is assumed to progressively increase from age 65 to 67.
Eligibility for the Government age pension for females is assumed to progressively increase from age 64 to 67.
You should be aware that if you or your spouse (if applicable) live longer than the period in retirement then the projected superannuation benefits might not be sufficient to maintain your lifestyle throughout retirement.
The "50% life expectancy age" shows the age at which 50% (1 in 2) of people at the retirement age will survive to.
The "10% life expectancy age" shows the age at which 10% (1 in 10) of people at the retirement age will survive to.
The life expectancy ages have been calculated based on The Australian Life Tables 2005-07.
Notes for videos.
Prepared and issued by Sunsuper Pty Ltd (ABN 88 010 720 840) (AFSL 228975).
You should be aware that the videos contain general advice which does not take into account the investment objectives, financial situation or needs of any particular individual. Because of this you should consider the appropriateness of any advice, having regard to your own particular objectives, financial situation and needs before acting on any advice. You need to apply the concepts to your own situation before making an investment decision.
Past performance is not a reliable indication of future performance.
You should obtain and consider a copy of the Product Disclosure Statement (PDS) before making a decision to acquire, or continue to hold the product. You can obtain a PDS by contacting the Customer Service Hotline on 13 11 84 or by visiting www.sunsuper.com.au.
The Member Advice Centre provides simple advice about your super for free. More detailed advice may incur a fee. All advice is provided by representatives of Sunsuper Financial Services Pty Ltd (ABN 50 087 154 818, AFSL No. 227867), a wholly owned subsidiary of Sunsuper.