Retirement Income Simulator information

This Simulator can be used to estimate the level of your (and your partner's) superannuation benefit at retirement. Using this Simulator allows you to:

  • See whether you might have sufficient funds to provide you with your desired standard of living in retirement.
  • See whether you might be in a position to receive government support in the form of the Age Pension, to supplement your own retirement savings.
  • See how different market situations might impact your situation.

It has been designed for Australian conditions only.

Today's dollars

This Simulator will give you an estimate of your benefits and retirement income in today's dollar values after taking out the effects of inflation. Showing results in today's dollars allows you to consider your future retirement income in the context of today's goods and services and your current standard of living.

For periods up to retirement age, the today's dollar amounts have been calculated by deflating future dollar amounts using community wage growth. Wage growth is commonly described as a combination of price inflation plus a margin for improvements in living standards. It is assumed your personal salary growth is the same as community wage growth. The Simulator estimates wage growth by adding a margin to the rate of price inflation shown on the Assumptions panel. For periods after retirement, the today's dollar amounts have been deflated by price inflation (CPI is a common measure of price inflation). This means your standard of living in retirement doesn't keep pace with that of the wage earning community.

All Simulator inputs should be in today's dollars.

Current environment

Unless otherwise stated the calculations are based on legislation and rules at 1 July 2023. In particular, the Simulator allows for:

  • Age Pension means tests
  • Phased increases to the Superannuation Guarantee rate (to 12% of earnings)
  • Concessional and non-concessional contribution caps
  • Higher contributions tax (Division 293)
  • Restricting after-tax (non-concessional) contributions once super balance exceeds $1.9m
  • Restricting the amount transferred to an account based pension on retirement to $1.9m
  • Low Income Superannuation Tax Offset (LISTO)

The Simulator does not allow for:

  • Low Income Tax Offset
  • Senior and Pensioner Tax Offset
  • Any applicable benefit payment tax before age 60
  • Any Centrelink payments apart from the Age Pension (including supplements)

The Simulator assumes that legislative thresholds and limits relating to superannuation, tax and social security are increased or indexed in line with wage inflation (unless otherwise stated). The actual rate of increase in these legislative thresholds and limits may vary from the assumed wage inflation rate.

The Simulator will be updated from time to time with changes in the legislative environment.

You are assumed to be exactly your input age; for best results, you should use your nearest age at the current date.

Super balance

The Simulator assumes your super is invested in a standard accumulation fund, and builds up with contributions (from you, your employer and Government contributions) and investment earnings over your working life. The Simulator provides for the deduction of all fees and costs, insurance premiums and taxes from your super balance.

In retirement, your super balance is made up of your account-based pension account and an accumulation account, if applicable (see Retirement income stream).

Retirement income stream

The Simulator allows you to nominate a lump sum amount to withdraw from your super at retirement. It is assumed that on your retirement at or after preservation age, you will convert the rest of your superannuation (up to the transfer balance cap) to an account-based retirement income stream. A retirement income stream enables you to choose how your money is invested (investment option) and how much money to draw down each year, subject to the legislated requirements. There is no tax payable on earnings or money taken out (after age 60) in respect of a superannuation account-based pension.

At retirement, if your super balance exceeds the transfer balance cap (currently $1.9m), only the amount up to the cap will be transferred to a tax free account-based retirement income stream. The excess will remain in your accumulation account, where earnings will be taxed at 15%.

In some circumstances you or your spouse (as applicable) may retire before preservation age. We assume an account-based pension will commence at preservation age, estimated based on the current age you’ve input.

Desired income

The Simulator works by allowing you to nominate a desired level of income in retirement. As a default this is set to 60% of the default salary or if higher, the ASFA Comfortable Standard for a single person of $51,630 (as at April 2024). You can adjust this to an amount based on your actual salary or another amount that suits you by using the slider button on the right of the chart. If you choose a lower level of desired income, your super balance will last longer in your retirement, while choosing a high level of desired income might exhaust your super balance over fewer years (compared to a lower level of desired income). If your selected level of desired income is below the minimum pension drawdown amount as required by superannuation law, then the Simulator may assume a higher level of retirement income than your selected level so as to remain compliant with the legislation.

All retirement income drawn is assumed to be spent, even if over the desired amount (i.e. it doesn't add to non-super assets)

For assistance in determining a retirement income, use our Retirement Income Budget Planner.

Retirement age

The Simulator assumes you start drawing your super from your retirement age. By default this is age 67, but you can change this on the Retirement Goals panel. If you select a later retirement age, your estimated super balance will last longer in your retirement. If you select an earlier retirement age, you may exhaust your super balance over fewer years. Please note that you cannot select a retirement age below 60.

Age Pension

The Age Pension amount for each year has been calculated based on your super assets and the Centrelink means tests. The Simulator assumes that you are an Australian resident. In the projection, the Age Pension is indexed with wage inflation, while the asset and income test thresholds are indexed in line with price inflation. The Simulator assumes the Age Pension income test to be as it applies to new Age Pensioners from 1 January 2015 and asset test as it applies to all Age Pensioners from 1 January 2017. If you have already retired it is possible that different rules apply to you which would change the results. You should seek financial advice if this applies to you. For the purposes of the means tests, your total financial situation is assumed to be represented by the information you enter on the Other Assets/Income panel and your projected super benefit.


The Simulator allows you to enter details for your spouse or partner in order to help you understand your total retirement financial situation. The amount of any Age Pension you receive depends on whether you are single or part of a couple. For simplicity, the values on the Other Assets/Income and Assumptions panels apply to both you and your spouse/partner.

You are both assumed to retire at the same point in time unless you choose a different spouse retirement age on the Retirement Goals panel.

Investment options

The Simulator lets you model the outcome of seven different investment options (each with a default assumed investment return). This is done according to the following mix of growth and defensive assets on your estimated super balance at retirement and your estimated retirement income:

  • 2.5% p.a. for Cash (100% defensive assets)
  • 4.9% p.a. for Conservative (33% growth assets / 67% defensive assets)
  • 6.2% p.a. for Moderate Growth (51% growth assets / 49% defensive assets)
  • 8.0% p.a. for Growth (72% growth assets / 28% defensive assets)
  • 8.2% p.a. for High Growth (85% growth assets / 15% defensive assets)
  • 8.4% p.a. for Shares (100% growth assets)
  • Variable return and mix of growth assets for Lifecycle depending on your age cohort

The default assumed investment returns have been set based on simulations from Mercer's Capital Market Simulator and are considered reasonable long-term estimates at the current date. The default returns listed above are illustrative only and should not be taken to provide an estimate of the amount of investment earnings you will receive.

The rate of investment return is assumed to remain constant over the projection period, except there is an adjustment applied to account-based pension account earnings to allow approximately for the removal of tax during the retirement phase.

If you have a short investment time horizon (for example less than 10 years) you may wish to consider current economic conditions in setting the investment return. Your time horizon includes the period your super will last in retirement. You can adjust the assumed rate of investment returns with the slider.

Assumptions and Stress Test

There are a number of factors that will affect the growth of your super and the retirement income it will provide. Some of the major factors, like investment returns and inflation, will fluctuate over time, but are assumed to lie within certain ranges over the long term.

For simplicity, the values for investment return and inflation remain the same for each year of the projection. The default values for these items can be changed. However, you should note that these default values are considered to be reasonable for the current conditions and are consistent with each other. If you change the default values it is possible that unrealistic scenarios will be projected. The default investment return assumption depends on the investment option you select. Note that the Simulator imposes some limits on the fixed assumptions but the actual experience could be outside these ranges (e.g. investment returns may be negative in some years).

The results given depend on the assumptions input. If these assumptions are not borne out in practice the actual level of your super balance at retirement and your retirement income may be different from that projected. In particular, if you are closer to retirement, short-term negative investment returns could significantly reduce the lump sum you may be able to take at retirement. It is recommended that you get regular updates of the projections and run a number of projections by varying the editable assumptions to illustrate the impact of changes in these assumptions on the projections, for example, the effect of different investment returns.

On the Stress Test panel you can choose to enable a simulated "stress test". With the "stress test" the values used for investment return and wage growth are based on simulations of different future economic scenarios from Mercer's Capital Market Simulator taking into account the underlying assets which your super might be invested in. The values for each of these elements will vary from year-to-year (and may be negative in some years). The values used will also depend on the investment option you select. By clicking on the 'Refresh' button on the Stress Test panel, a new scenario will be chosen and the values will change. At the right of the screen you will see a chart showing the real return under each "stress test" scenario. The real return is the return over and above the level of wage inflation.

There are other assumptions used in the calculations which are set by legislation and cannot be changed (e.g. tax bands and Age Pension means test limits).

Tax File Number

There are significant taxation penalties if you do not provide your Tax File Number to your superannuation fund. The Simulator operates on the basis that you have provided your Tax File Number, and cannot simulate the impact of not doing so.


The Simulator uses the input salary to calculate Superannuation Guarantee (SG) contributions, eligibility for any Government contributions, and to work out your after-tax income. If you have other income, use the Other Income (Pre-retirement) slider on the Other Assets/Income panel to record the after-tax value of this income.


If you are employed, employer contributions are calculated based on the input contribution rate and your gross salary (i.e. not limited to the Superannuation Guarantee maximum contribution base, which is the maximum Superannuation Guarantee contributions that an employer is required by law to make for an employee). Employer contributions are assumed to be at least 11% of salary, increasing to 12% of salary by 1 July 2025.

If you are self-employed, the Simulator doesn't allow for Superannuation Guarantee or any other employer contributions. You can set salary sacrifice or after-tax contributions to reflect your situation.

Salary sacrifice contributions come from your pre-tax salary, while after-tax contributions are taxed as salary before going into super. Note that salary sacrifice contributions include any contributions for which a tax deduction is claimed. The amounts of salary sacrifice and after-tax contributions are assumed to increase with wage inflation.

You can set salary sacrifice or after-tax contributions to reflect your situation. Alternatively, you can have the Simulator automatically calculate levels of after-tax and salary sacrifice contributions based on your total voluntary contributions.

If voluntary contributions are calculated automatically, the change in after-tax income is allocated first to after-tax contributions to maximise the Government co-contribution, then to salary sacrifice contributions to fill up to the standard concessional cap and finally to after-tax contributions to allocate any remaining change in after-tax income.

Consistent with superannuation law, the Simulator operates on the basis that salary sacrifice and after-tax contributions can be made up to age 75 (provided the work test is met for those over age 65) see the Australian Taxation Office (ATO) website for information about the work test), but there is no age limit on Superannuation Guarantee contributions.

The Simulator allows for excess contributions tax if you input contributions above the legislative limits (which are assumed to be indexed in line with wage inflation). Please refer to the Tax section for more information.

Government co-contribution

The Simulator assumes that you are eligible for the Government co-contribution if your salary is less than the legislated limits (e.g. $58,445 in the financial year 2024/2025) and you make after-tax contributions. For full details of the eligibility criteria for the Government co-contribution, visit the ATO website. For the purposes of calculating the Government co-contribution (if applicable), it has been assumed that your total annual assessable income plus reportable fringe benefits is equal to your current salary plus other pre-retirement income (or half of your other income if you have a spouse) you input. It has also been assumed that the income limits are increased in line with wage inflation.

Low Income Superannuation Tax Offset (LISTO)

The Simulator assumes you are eligible for the LISTO if your salary plus other income (or half of your other income if you have a spouse) is less than $37,000. For full details of eligibility criteria visit the ATO website. The amount of the LISTO (if applicable) is calculated as 15% of your concessional (pre-tax) contributions, subject to a maximum LISTO of $500.


Employer contributions and salary sacrifice contributions are taxed at 15%. However, significant additional tax applies if your contributions to superannuation exceed certain legislative limits. The limits for the 2023/2024 financial year are:

  • The limit for concessional (employer or salary sacrifice) contributions is $27,500.
  • The limit for non-concessional (after-tax) contributions is $110,000.

The Simulator assumes that these limits are indexed with wage inflation unless otherwise indicated.

If the sum of employer contributions and salary sacrifice contributions exceed the concessional contributions limits above, the excess is taxed at your marginal tax rate (including Medicare levy) and the Simulator deducts this tax from your super balance at the point of the contribution; hence the excess concessional contribution interest charge is not allowed for. The Simulator also does not allow for the carry forward of unused concessional contributions cap.

Under superannuation law, individuals under age 65 can make up to $330,000 in non-concessional contributions in one year (but the amount of non-concessional contributions that they can make are limited in the following two years so that no more than $330,000 can be contributed for the individual over the three years). Note that the Simulator does not allow for this.

After-tax (non-concessional) contributions below the non-concessional contributions limit are not taxed. After-tax contributions over the limit are taxed at the highest marginal tax rate (plus Medicare levy).

If your super balance exceeds $1.9 million you'll no longer be eligible to make after-tax contributions. If you have elected to make regular after-tax contributions, the Simulator will not apply these contributions from the year after you become ineligible (the contributions will remain in after-tax income). If you elect to make a one-off after tax contribution, but are no longer eligible, this contribution will not be made. The Simulator assumes this limit is indexed in line with price inflation.

The Simulator allows for future application of the Division 293 tax on the contributions of high income earners. Division 293 tax is levied on the "low tax" contributions of members whose "adjusted income" exceeds $250,000. The Simulator assumes your "adjusted income" to be the sum of your salary, other income and concessional contributions. The Simulator does not allow for any existing Division 293 debt that might be held with the ATO and assumes future Division 293 tax is paid from your after-tax income in the year it is incurred. For full details of the Division 293 tax, go to the relevant ATO website page.

The Simulator assumes that the investment return used for the accumulation of the super balance has been reduced for investment tax. The Simulator also assumes that investment earnings on retirement income stream products are not subject to tax. Please note that the investment earnings on any amount exceeding the $1.9m transfer balance cap (which the Simulator assumes is kept in accumulation phase) are taxed at 15%.

Benefit payments are tax-free if you are aged 60 or over. This is reflected in the calculations of the Simulator. The Simulator does not allow for any applicable benefit payment tax for amounts taken under age 60.

Fees and insurance cost

The assumed investment fee and percentage based administration fees are the fees that are expressed as an annual percentage of your super balance. The default value of this item is based on the percentage based administration fees and investment fees (indirect cost ratio) for the selected investment option. The Simulator deducts these amounts from the investment return shown prior to calculating earnings for each year.

The assumed insurance premium and administration fees are deductions expressed as an annual dollar amount, which includes dollar based administration fees and current insurance premiums. The Simulator assumes that these amounts will increase in line with wage inflation and are deducted from your super balance each year until you retire.

Other income

In addition to income from your superannuation and Age Pension, you may have other sources of retirement income. Please enter all values in today’s dollars on the Other Assets/Income panel.

Earnings from any investment assets that you expect to have at retirement will contribute towards your retirement income. Investment assets include items such as bank and building society deposits, cash, shares and term deposits. The Simulator determines the earnings on investment assets by using deeming rules from the Age Pension income test. The Simulator does not allow for the capital of your investment assets to be drawn down.

Other income (e.g. from rentals and hobbies) is assumed to increase with wage inflation up to retirement, and price inflation thereafter. You can enter the post-tax value of other income you may receive using the Other income (in retirement) slider, but do not include income on your investment assets.

Home Loan

Your current home loan amount increases with interest at the input interest rate and is reduced by the annual equivalent of the monthly repayment entered. Your home loan repayment is assumed to be paid regardless of your income, and hence is not shown as impacting your after-tax income on the Your income chart. While the Simulator does not set a lower limit on repayments, it may not be realistic to model a very low repayment amount.

At retirement, you can choose to withdraw a lump sum amount from your super to pay off any remaining home loan. The maximum you can pay off is the lesser of the outstanding loan and your super balance at retirement. If you have a spouse retiring at the same time (or already retired), the home loan repayment is taken proportionally from each partner’s super. If only one spouse is retired the repayment comes from their super.

Life expectancy

The average life expectancy age has been calculated based on the Australian Government Actuary, Australian Life Tables 2015-2017. The calculations allow for future improvements in longevity from your current age, based on historical improvement rates.


The Simulator gives you the option to select up to three career breaks by entering the age you expect to take a break and the number of years you expect to break for. While on a career break, your super balance is projected to continue to grow with investment returns, but the Simulator operates on the basis that you earn no income and make no contributions to super during a career break.

You can also select a career change by entering the age at which you will change salary and the new salary (in today’s dollars). This feature is designed to allow you to model going part time, getting a promotion or changing jobs.


This Simulator has been prepared by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293. Any advice contained in this Simulator is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this Simulator, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take. 'MERCER' is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917.

This Simulator is not intended as an advertisement for any product issued by MFAAPL or any of its related entities.

Copyright 2023 Mercer LLC. All rights reserved.