There are several assumptions which have been made and support the basis of all calculations. These are as follows:
The calculator is based on information and current laws interpreted as at 1 July 2016. You should check that they remain applicable prior to acting on information contained in this calculator.
No allowance has been made for any changes proposed in the 2015/16 Federal Budget that have not been legislated as of 1 July 2016.
For the purposes of determining income tax, contribution caps and minimum, it is assumed that the projection is run on the first day of the financial year and that you are your current age for the entire financial year. The calculator projects your superannuation balance over a whole number of years.
It is assumed you have provided your tax file number to your superannuation fund. This calculator is not appropriate for defined benefit funds and members of untaxed funds.
Rice Warner has independently verified that the calculation results produced by this calculator are consistent with the methodology and assumptions adopted.
By default, wages are assumed to increase at the general wage inflation rate (2.5% p.a.) over the projection period. All results are expressed in today's dollars by discounting at the price inflation rate (set to 2.5% p.a. by default). You can change these assumed percentages in the assumptions section.
Your salary is assumed to increase at the assumed level of general wage inflation. The personal income tax rates applicable in the 2015/16, 2016/17 and 2017/18 projection years are assumed to be the legislated tax rates for those years as at 1 July 2016. In each subsequent projection year, the personal income tax brackets (and Medicare Levy thresholds) are assumed to increase in line with the assumed level of general wage inflation. The temporary budget repair levy of 2% on the part of a person's taxable income which exceeds $180,000 is assumed to apply for the 2015/16 and 2016/17 financial years. You are assumed to be an Australian resident for taxation purposes. In calculating the Medicare Levy, the individual income thresholds are assumed to apply, and the family income thresholds are assumed to not apply.
The Medicare Levy is assumed to be 2% of taxable income for the 2015/16 tax year and subsequent years.
In each projection year, your entitlement for the Low Income Tax Offset (LITO) is estimated based on your taxable income. The rates and thresholds used to calculate LITO in the 2015/16 projection year are assumed to be the legislated rates and thresholds for those years as at 1 July 2016. The maximum amount of LITO and the income threshold over which LITO starts to reduce are assumed to increase in each year subsequent to 2015/16 in line with the assumed level of general wage inflation.
It is assumed you will not take any breaks from full time work.
Contributions are assumed to be spread evenly across the year on a monthly basis.
Employer contributions include all concessional contributions made by your employer other than salary sacrifice contributions.
By default, it is assumed you initially receive employer contributions of 9.5% of your "employer contribution base", subject to a maximum of your concessional contribution cap. You can change the assumed employer contribution rate. By default, "your employer contribution base" is your salary. If you answer “Yes” to “Apply SG Maximum Superannuation Contribution Base?”, then your SG contribution is capped at the SG rate multiplied by the SG Maximum Contribution Base, which is $51,620 per quarter in the 2016/2017 financial year. By default, in each projection year, if your employer contribution rate is below the assumed Superannuation Guarantee (SG) charge rate applicable in that year, your employer contribution rate is increased in that year to equal the SG charge rate. You can disable this functionality by changing the "Apply minimum SG contribution rate?" setting.
The SG charge rates assumed to apply in each year are as follows:
|Year to 30 June||SG charge rate (% p.a.)|
|2016 - 2021||9.5|
|2026 and thereafter||12|
It is assumed you make no other concessional contributions and that your employer contributions are not affected by any salary sacrifice contributions.
Any contributions entered by you (both employer, including salary sacrifice, and personal contributions) are assumed to increase in each year in line with salary. It is assumed no contributions are made in excess of the concessional contribution caps.
The concessional contributions cap of $30,000 is subject to indexation. Allowance is made for the higher concessional contributions cap of $35,000 (not indexed) which currently applies for individuals aged 49 and older on 30 June 2016.
The calculator has not accounted for any non-concessional contributions that may be made.
In most cases concessional contributions are assumed to be subject to tax at 15%.
Concessional contributions are assumed to be subject to tax at 30% in the super fund for individuals with income including concessional contributions over $300,000 (not indexed). Where an individual's income exceeds $300,000 a year due to the inclusion of their concessional contributions, the higher tax rate of 30% is assumed to apply to the excess over $300,000, with 15% applying to the balance of concessional contributions.
You are eligible to make personal contributions if you under age 75 however between age 65 and 74 (inclusive) you must have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contributions are made. You are not eligible to make personal contributions after you turn age 75.
The calculator has defaulted superannuation account investment returns to 6.37% (assumed Balanced investment option, net of investment fees and tax; rounded to 6.4%). The actual investment return applicable may differ significantly from this assumption and, if this is more or less than the assumed value, the outcome at the end of the selected period could be affected. You can change this assumed rate in the Assumptions section.
Fees and insurance premiums
By default, fees and insurance premiums are assumed to be as follows. You can change the values used for the administration fee, and insurance premiums at the top of this section.
Fees and insurance premiums are deducted on a monthly basis.
Dollar fees and insurance premiums are assumed to increase in line with the assumed level of general wage inflation. Fees are assumed to remain constant in percentage terms over the projection period.
Low Income Superannuation Contribution (LISC)
In each projection year prior to 2017 in which you or your employer makes a concessional contribution, your eligibility for a LISC is assessed and a LISC is added to the superannuation account if applicable.
Your eligibility is assessed by comparing the projected "relevant income" amount to the LISC income threshold, and applying the standard rules for calculating the LISC. The "relevant income" amount is assumed to be your taxable income plus salary sacrifice contributions (the actual LISC income test also includes other amounts). It is assumed that you meet the other eligibility criteria. The LISC income threshold and maximum payment amount are assumed to remain constant over the projection period until 30 June 2017. As assumptions have been made about your eligibility for the LISC, including your "relevant income", the projected LISC may not represent your actual LISC entitlement. In line with legislation as at 1 July 2016, it is assumed that the LISC will not be payable in respect of concessional contributions made on or after 1 July 2017.
It is assumed you will retire at the end of the financial year in which you reach your nominated retirement age. The assumed retirement age is 70. You can change this in the assumptions section.
It is assumed you will have reached your preservation age or will have met a relevant condition of release as at your nominated retirement date. If this is not the case, you will not be able to access your superannuation benefits until after you have reached your preservation age or satisfied a relevant condition of release. You should check your preservation age before using the calculator.
Disclaimer & Limitations
The calculator is based on legislation current as at 1 July 2016. It is based on the limited information that you have provided and assumptions made about the future. The amounts projected are estimates only are not guaranteed and the actual outcomes may differ significantly.
It is important to note that this information is predictive in character, may be affected by inaccurate assumptions or by known or unknown risks and uncertainties, and may differ from results ultimately achieved. AMP (and its officers and employees) do not guarantee investment performance or represent that any particular investment return will be achieved.
This calculator is not intended to represent financial advice. In particular, decisions should not be made in reliance on the results produced by the calculator. The estimates generated do not take into account all of your personal circumstances and you should obtain professional advice from either a AMP financial planner or another licensed financial planner before making any decisions about your superannuation.
You should consider updating the projections provided by this calculator when your circumstances change.
The Little Extra calculator is issued by AMP Life Limited, ABN 84 079 300 379, AFS Licence No. 233671 (AMP Life). AMP Life has developed the calculator with the assistance of Rice Warner Pty Ltd. AMP Life and its related companies specifically disclaim any liability and responsibility to any person who relies, or partially relies, upon anything done or omitted to be done by the calculator.
© AMP Life Limited. Any advice provided is general. Consider your circumstances and the relevant disclosure documents available on amp.com.au before deciding what’s right for you. Our Financial services guide has information about our services, relationships and how we are paid. Contact us on firstname.lastname@example.org for a copy.