Have you found yourself wondering if you have the right amount of money in your super for your age? Considering if your super contributions will be enough for the retirement you’re planning? Or just concerned that you have selected the right super fund, or if there are any other tax benefits in contributing a little more to bulk up your retirement?
Searching for a super calculator can be overwhelming, with so many options available that you don't even know where to start. Fear not. You found the right page. We are comparing the top 5 Super Calculators to help you choose the one that best suits your needs.
First, check your own super
Login into your own super account, or get your latest statement to get the information you need. Write down how much you currently have in your super account, and what investment options you are currently in.
Then visit your super's website to examine the investment performance, along with the super admin and investment fees, which will vary based on your investment options. Not all calculators will use all this information, but if you want an accurate number you will need them.
How much money do you need to retire?
That’s actually the big question we are all trying to answer. The ASFA Retirement Standard provides a guideline outlining what budget you'll need for a comfortable or modest retirement and the necessary super balance at age 67 to achieve it.
The one thing to keep in mind, however, is that that calculation is based on today’s value of money. Meaning, if you are close to retirement, it’s a solid benchmark.
But for those with decades to go, like a 25-year-old, you will need to account for inflation, which could significantly increase the figures. For instance, $100K 40 years ago is over $380K today. So if you are looking to retire in 40 years, you will most likely need 4 times the amount that the ASFA says.
The Reserve Bank of Australia Inflation Calculator is a useful tool for understanding how inflation affects the cost of items over time.
Pick a super calculator
There are dozens of super calculators on the web, so knowing the difference between them is very important to understand how you can get the most accurate information. The first thing to know is that all of them have some assumptions built into them. If the assumptions are wrong, you will get different numbers.
We entered the exact same numbers in all the calculators mentioned in this article, without changing any of the assumptions, and we had a difference of $30K between the lowest and highest estimated super value at age 67. But when we actually changed the assumptions to match our clients high growth investment option, that difference jumped to $370K! So which one should you use?
Superannuation fund calculators
Most super funds have their own calculators. Some examples are AustralianSuper, Australian Retirement Trust and REST (the largest super funds - i.e.. the ones with the most members). If you're with a different superfund, a simple Google search combining your superfund's name with 'calculator' should direct you to what you need.
These calculators use assumptions based on the funds' standard investment options and fees. So, if you haven't customised your super’s investment options, they are likely to be very accurate. Plus, they require less initial information from you.
Canstar superannuation & retirement calculator
Canstar is a consumer review and financial comparison website. Canstar’s calculator offers a different approach. They present your probable retirement income instead of a lump sum. This spares you from making detailed retirement budget calculations and gathering fee and performance data. However, its one-size-fits-all nature may not perfectly reflect your unique situation, especially if you've made changes to your super.
Moneysmart superannuation calculator
Moneysmart helps people make financial decisions with various tools, and is run by the Australian government. Moneysmart’s calculator comes with the usual assumptions if you wish to use the simple version.
But it is also a great tool if you wish to input all the data you compiled from your super to get the most accurate results. All you need to do is change the fund fees and investment options from default to other to be able to input your own numbers.
This is the calculator we used to demonstrate how the high growth investment options would result in a $370K difference for our client.
Takeaways
Using a superannuation calculator is not about just seeing a big number. It’s about understanding how your current age, super contributions, and investment options can influence your lifestyle in retirement. These tools can provide you with valuable insights, allowing you to make informed decisions in your retirement planning journey.
However, a solid grasp of how your super works is crucial to maximise its potential. Extra contributions help, but adjusting investment options could be an easier and potentially more profitable strategy for securing a comfortable retirement.
Disclaimer: The information contained in this website and any of the resources available through it including eBooks, fact sheets, and seminars (‘Content’) has been prepared for general information purposes only and is not (and cannot be construed or relied upon as) personal advice.
