The Retirement Savings Calculator provides an estimate of the amount of money you
will save by the time you retire and the number of years these savings will last
you in your retirement.
It incorporates superannuation contributions made by your employer from your salary
and any additional contributions you make yourself.
If You've Already Retired
The Retirement Savings Calculator is a great tool even if you are no longer accumulating
savings for retirement. It can tell you how long your current savings will last.
About the Retirement Savings Calculator
The
retirement savings calculator provides an estimate of the amount of money
you will save by the time you retire and the number of years these savings will
last you in your retirement.
It incorporates superannuation contributions made by your employer from your salary
and any additional contributions you make yourself.
If You've Already Retired
The Retirement Savings Calculator is a great tool even if you are past the point
of accumulating savings for retirement. It can tell you how long your current savings
will last. To use the tool to see how long your savings will last, set "Your age
now" age and "Expected retirement age" to your present age, and put zeros into the
following input boxes:
- Your contribution
- Your employer's contribution
- Annual contribution increase
- Rate of return before retirement
Terminology
Current retirement savings - This amount includes the current total balance of any
superannuation funds you have as well as any other amounts you have specifically
put aside for your retirement.
Your age now - This is simply your current age, expressed in years.
Expected retirement age - This is your anticipated retirement age, typically 65
or 60. This indicates when your wealth accumulation stage finishes and your wealth
depletion stage begins.
Expected annual contribution increase - This is the percentage increase in total
retirement contributions for each year. Remember that this figure is applied to
both your own increase in contributions and the amount contributed by your employer.
This might arise because employer sponsored contributions rise as a percentage of
your salary or because your salary rises over time. For example, if your total contributions
are $1000 in year one and you expect them to increase to $1050 in year two, the
expected annual contibution increase is 5 percent.
Expected rate of return before retirement - This is the rate of return you expect
to earn on your retirement savings up until the year that you retire. This is applied
to your own personal savings and investments, your employers contributions to superannuation
as well as your own contributions to superannuation.
Expected rate of return after retirement - This is the rate of return you expect
on your retirement savings after you stop working. Most people do not invest as
aggressively after they retire, and therefore this figure is usually lower than
the rate of return before retirement.
Expected annual inflation rate - This is the annual inflation rate that you expect
from now on. The Reserve Bank of Australia uses a range of between 2 and 3 percent
inflation as an ongoing goal. This figure impacts significantly on your future income
requirements and you may want to use different inflation assumptions and see how
they impact your calculations.
Current gross yearly salary - This is your total yearly income before tax from employment.
It is used to calculate the approximate employer contribution made towards your
superannuation. This figure is based on employer contributions of 9 percent but
can be modified if your employer contributes at a different rate.
Your weekly/fortnightly/monthly/yearly contribution - The amount of money that you
regularly contribute towards your retirement savings.
Your employer's weekly/fortnightly/monthly/yearly contribution - This is the amount
of money that your employer regularly contributes towards your superannuation. The
figure suggested is based on a contribution rate of 9 percent but can be changed
if your employer contributes at a different rate.
Yearly retirement income required (current dollars) - This is the amount of income
you require to live on during your retirement. This amount may be less than your
current income as mortgage repayments may no longer be required, you may move to
a less-expensive location or you may experience a reduction in your general living
expenses. Express this figure in today's dollars and it will be adjusted for inflation
in the calculations. The amount you need in retirement defaults to two thirds of
your current annual salary, however you can modify this amount.
Amount saved upon retirement - This is the total of your retirement savings when
you retire.
Cash needed at retirement - This is the amount of savings you will require to live
on per period, when you retire. This amount has been adjusted for inflation.
Years of retirement provided - this is the number of years your savings should last
you from when you retire.
Savings lasts until age - This is your age when your retirement savings are depleted.
Assumptions
Your employer's contribution to superannuation defaults to 9 percent of your salary.
The amount you need in retirement should be entered in present day dollars, it will
be adjusted for inflation by the calculator.