Retirement Income Simulator

Further to our post on 14 July, the required regulatory changes were released in an update that included the following changes:

  • Standard default inflation rates of 4% p.a. for salary growth and 2.5% p.a. for price growth
  • Ensure that default investment returns are consistent with the standard default inflation rates (RG 276.212)
  • Future values are deflated using salary growth for the period up to retirement age and price growth for the period after retirement age
  • Relevant disclosure updates that reflect these changes

The changes that will be most obvious to users of the Retirement Income Simulator are in relation to retirement adequacy. To speak meaningfully of a level of retirement income, you need to index the income at the same rate you deflate it. ASIC now requires that retirement income is deflated with price growth; we have therefore changed the indexation of retirement income to price growth, instead of wage growth. This will give the appearance that retirement incomes are higher, last longer or both. In reality this is because retirement incomes grow more slowly under the new approach, and will not keep pace with improvements in living standards enjoyed by the wage earning community.

A related change is the presentation of the Age Pension. In reality, the Age Pension is indexed with the higher of wage and price inflation; in the long term this is wage inflation. Hence in the Simulator, you will see the Age Pension growing in real terms even after the maximum entitlement is reached. This is because it increases with wage growth, but is being deflated with price growth.

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Posts by Quarter

2023 q3

Calculator update 1 July 2023

2022 q4

Superannuation calculator regulatory update goes live

2022 q3

Superannuation calculator regulations updated
Calculator update 1 July 2022

2021 q3

Calculator update 1 July 2021

2020 q4

Tax changes arising from Federal Budget 2020

2020 q3

Calculator update 1 July 2020

2020 q2

Making the simulator more accessible
Two new RIS features

2019 q3

Deeming rate changes July 2019
Calculator update July 2019

2019 q2

Inflation update
Home loan feature

2017 q3

New enhancement for the self-employed
Calculator update July 2017

2017 q1

Calculator Updates for March 2017

2016 q4

Calculator Updates for December 2016
Inflation update
Calculator updates for October 2016

2016 q3

Modelling inflation in the simulator
Calculator updates for July 2016

2016 q2

Federal Budget 2016
Calculator updates for April 2016

2016 q1

Career changes in the Retirement Income Simulator
Changes to online calculator regulations

2015 q4

Calculator updates for December 2015
Alternative input methods for the Retirement Income Simulator
Retirement Income Simulator improvements for the retirement phase

2015 q3

Age Pension and ASFA Retirement Standard changes
How much super do you need?
Calculator Updates for July 2015

2015 q2

Congratulations to Media Super
Infographics for simplified retirement planning
Retirement Income Simulator gets a responsive redesign