Retirement and net worth planner

How the projection works

Everything is in today’s dollars, and every growth, return and interest rate you enter is a real rate (after inflation). Inflation is used only for debts (see below). Each year from your current age to the age you plan to, salary rises with real wage growth and other amounts stay flat. Super receives employer, salary sacrifice and personal contributions less 15% contributions tax, and its earnings are taxed at 15% until you retire past preservation age, then at 0%. Investment income is reinvested and taxed at your marginal rate with franking credits. Companies retain profits taxed at 25% or 30%; withdrawals are franked dividends taxed at your rates. Trust income is taxed to you each year.

Investment property rent, costs, loan interest and depreciation are combined. A loss is negative gearing and reduces your other taxable income. Loans are amortised monthly, with interest-only periods and offset accounts. When a property is sold, the gain over its cost base (reduced by depreciation claimed) is taxed with the 50% CGT discount.

Investment properties are one list. Each is either owned now (current value, loan balance and cost base) or bought in a calendar year, with your age shown beside that year. A future purchase has a price in today’s dollars, stamp duty, and a loan as a dollar amount or a loan-to-value ratio, interest-only or principal and interest. Rent, holding costs, growth, depreciation, the offset and when you sell are the same for both. The deposit is taken first from cash, a home-loan offset, investments, or equity in a property you already own (a top-up of its loan, or a new loan). You can also sell another investment property in the purchase year — one you own now, or one bought earlier that isn’t already sold or funding a different purchase — and put its net proceeds, after selling costs, capital gains tax and the loan payout, toward the deposit. Anything left over goes to cash. Anything still short comes from the deposit source, then your drawdown order. Super stays locked until you’ve retired and reached preservation age. A sale can’t be used twice, can’t fund a property you don’t own yet, and can’t run in a circle. Rent, costs, repayments and negative gearing start in the purchase year; the loan is nominal and shrinks with inflation, like any property loan you already have. Each purchase shows a status beside it, and On track lists how it’s paid for: whether it’s achievable, trims your retirement income, or can’t be funded. If it can’t, you’re shown what would: saving more, buying later, a cheaper property, or a bigger loan. The goal seek, On track? and the net worth chart include it. The cash flow chart leaves the one-off deposit, stamp duty and any sale or draw that exists only to buy it off the bars, and a marker opens that purchase on On track.

After you retire, the target spending (after tax, in today’s dollars) and any lump-sum goals are paid from income first, then drawn in the order you choose. Super can’t be touched until preservation age (60 by default), so if you retire earlier, the bridge years must be covered by cash, investments, companies, trusts and property. A shortfall in those years is flagged even if your total net worth looks fine, and the required saving also covers it.

A home loan can have an offset account. Interest is charged on the loan minus the offset, the interest saved isn’t taxed, and repayments stay the same, so the loan is paid off sooner. You can add a fixed amount to the offset each working year. Once the offset covers the loan, that amount goes to an investment you choose instead, and you can keep the offset or pay out the loan from it. The offset counts as cash: in net worth, in the drawdown and for the Age Pension. It’s paid out to you if the home is sold.

Homes you live in count in your net worth. A home marked as kept is never sold. A sellable home is sold at the age you choose, or when it’s reached in the drawdown order. As a main residence the sale is free of capital gains tax, and there’s no negative gearing. Selling costs, any loan and an optional downsize or replacement home (in today’s dollars) come off the price. The rest is invested in a new investment or one you already have, with a cost base equal to the proceeds, and drawn down like any other investment. For the Age Pension, a home you own is exempt from the assets test, but invested sale proceeds count.

Surplus is free cash flow left after spending and planned contributions. Under “Surplus goes to” you choose where it goes: cash, a home loan offset, an investment, a company or trust, extra super, or extra repayments on a loan or debt. You can split it by percentage (must total 100%) or fill destinations in order, each up to an optional yearly limit. Anything a destination can’t take spills to the next, then to cash: a loan already paid off, an offset that fully covers its loan, the limit you set, or the concessional cap after employer and salary-sacrifice contributions. Extra super is treated as a deductible personal contribution. It pays 15% contributions tax, and the income tax saved is added to the surplus. Extra repayments on a home loan or debt pay it off sooner, while on an investment loan they lower the repayments. You can set a different allocation for retirement. The goal seek and On track? use the allocation you choose. Older saves keep sending surplus to cash.

Each home can have any number of moves, run in age order. Each move sells the home you hold at that point, so you can upgrade at 45 and downsize the new home at 70. Every move has its own sale age (or “when needed”, which always runs after the dated moves), selling costs, replacement price, optional new mortgage, and where spare proceeds are invested. A move that sells a home already sold without a replacement, or two moves at the same age, is flagged and ignored. Each move shows a status beside it, and On track lists how the sale or upgrade is paid for. Saves with a single replacement home are converted to one move.

The Cash flow tab answers how much is free each pay and how much you need to save. Take-home pay is pay after salary sacrifice, less income tax and Medicare on that pay. Free cash flow is take-home pay less living expenses, home loan and other debt repayments, plus property cash (rent less costs and loan repayments), less any tax on investments and rent. Required saving comes from the same goal seek as the rest of the planner, covering retirement income, bridge years, lump-sum goals, every home upgrade and every future property purchase, converted to your pay cycle. The model assumes free cash flow you don’t spend is saved. Planned contributions (offset top-ups, investments, company or trust, personal super) are part of the required saving, not added on top. Employer super and salary sacrifice come out before take-home pay. Home moves, property purchases and lump-sum goals are left out of the cash flow charts, so those years look like any other: pay, rent, property costs, repayments (including a new mortgage or investment loan from that year on) and tax on income stay. A marker such as “Home upgrade at 47, see funding” or “Buy the property in 2031, see funding” opens that move or purchase on On track. The funding breakdown sits on that card: sale proceeds, offset released, each asset drawn (with the tax that causes), that year’s cash flow, the new mortgage and any shortfall. Where the top-up is drawn alongside other spending that year, its share of each draw is pro rata. New mortgage repayments are shown per pay and as their own series, and you’re warned if they push free cash flow negative.

If the replacement costs more than the sale frees up, the difference is treated as a home upgrade goal: top-up = replacement + costs − (sale price − selling costs − loan + offset). It’s paid in the sale year from your assets in drawdown order, and super is only used once you’ve retired and reached preservation age. You can choose a new mortgage (rate and term) for whatever your assets can’t cover. Otherwise the gap is a shortfall, the upgrade is shown as not achievable on On track, and the plan isn’t on track. The required-savings and On track? figures include the upgrade. A home set to sell “when needed” is never sold to upsize, because that wouldn’t fund retirement. You’re told when that happens.

Required saving, earliest retirement age and sustainable spending are found by searching the projection. The “needed” amount for each year is the smallest balance of retirement assets (everything except homes you keep) from which the rest of the plan still works. Tax brackets, super caps and Age Pension thresholds stay at their 2025–26 values in today’s dollars, which is the same as assuming they rise with inflation. Loans and other debts are the one exception. They’re nominal: you enter the actual interest rate and the repayments stay fixed in dollars. Each year their balances, repayments and interest are converted into today’s dollars using the inflation input (default 2.5%), so the real value of debt shrinks over time. A loan’s offset balance is treated as nominal cash in the same way, so offset and loan stay comparable. The yearly amount you add to the offset is entered in today’s dollars. The Age Pension is a rough estimate.

Not modelled: Division 293 tax, the transfer balance cap, minimum pension drawdowns, carry-forward concessional contributions, CGT on super, couples’ separate tax, HELP, the Medicare levy surcharge, land tax, and sequence-of-returns risk. General information only, not financial advice.