Retirement Income Calculator – Saving To Retire

When it comes to retiring comfortably, using a retirement income calculator in advance might be helpful. Everyone looks forward to the point in their life when the nine to five ends. However, you may neglect to consider how you will support yourself when you reach this chapter of life.

Setting goals and creating a plan for your retirement will be vital. But how do you go about this? And what do you do if you don’t have enough in savings? There are several alternatives to help you, from no credit check loans to the age pension. However, having a plan for the future might be the best course of action. Join Monzi to discuss everything from cash loans to superannuation to help you prepare for your financial future.

Please note that specific ideas and products presented in this article may not be on offer by Monzi or the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.

What is retirement income?

Your retirement income is the source of money that you have available to you at the end of your career. You most likely would have heard of the age pension or superannuation, but how do these income sources interact with each other? And are you even eligible to receive them?

Your retirement income doesn’t have to be based on your super or government payments, either. If you are an investor, you may be able to use your investments as a source of income in future. Alternatively, you may be able to take a pension loan that you can use as a source of income. With so many options available, it can be challenging to work out what you will and won’t have available to you. Therefore a retirement income calculator may come in handy.

Why would you need to calculate it?

As above, it is easy to lose track of what is and isn’t a source of income for your future retirement. Not only this, but planning is also the best way to ensure that you won’t have to work for the rest of your life. Everyone deserves to be able to kick their feet up at the end of their career and rest. Therefore using a retirement income calculator can help you ensure that you will have this.

Not only will you want to calculate what your overall retirement income will be. You may also want to know how much superannuation you will have available to you upon your ideal retirement age. The pension is not guaranteed; your superannuation is. Using a retirement income calculator can also help you identify whether your current super fund gives you the best deal. All these tidbits of information can be handy, so be aware of what’s available to you and where you can take steps to better your retirement.

How do you calculate retirement income?

You can find out how much your retirement income will be (in the easiest way) by using a retirement income calculator. The first and most common calculation for estimating your available retirement income is calculating how much super you will have available to you per year. These calculators are commonplace, and you have a plethora of choices when choosing a calculator to use.

Some super income calculators can:

  • Ask for your current age, income before tax, and desired super per year.
  • Use this information to generate a graph displaying your yearly income from super, beginning from your preservation age to approximately 89 years old.
  • Show you your desired and current income.
  • Explain the logic behind the calculations provided.

This can help you work out what the bulk (or a significant portion) of your retirement income is likely to be per year. Alternatively, you may be able to find a calculator that can estimate what your entire superannuation savings will look like. Another retirement income calculator you may have available to you is a retirement needs calculator.

Some retirement needs calculators can:

  • Ask you for your age, gender, income, and what you may like your future income to look like.
  • Input your current expenses, from housing and energy to household goods and leisure.
  • Ask you what significant expenses you may be looking to undertake when you retire.
  • Generate a retirement snapshot showing what super balance you will need and a comfortable income required for you to retire.

This type of retirement income calculator may be better if you are looking for a bigger picture. It may then help you to identify areas where you can make changes to see a boost in your retirement income.

Where can you find a retirement income calculator?

Depending on the type of retirement income calculator, you may be able to find these tools almost anywhere online. Simply search for a ‘retirement income calculator’ and see which options the search engine generates. You will likely find these calculators provided by banks, financial information websites, or superannuation providers. This is primarily an attempt to attract you as a customer via their handy calculator.

Just because you use a provider’s calculator does not mean that you need to follow through and use their services. These tools are free, and you can use them whenever you like, whether for legitimate financial planning or just out of curiosity. However, as with any financial calculator, note that the generated results are just estimates and are subject to change. Use the calculations as a guide, not as gospel.

If you would like to know more about the other calculators available to you, why not check out these articles:

What is a preservation age?

Your preservation age is the age at which you can access your superannuation, providing you have retired. If you were born before 1960, your preservation age was 55. Therefore you could access your super after meeting a condition of release. However, if you were born after 1960, your preservation age is likely between 60 and 65.

There are some instances where the government will permit you to access super early. However, most of the personal circumstances that this caters to are not desirable. If you are in a challenging financial situation, visit the Centrelink website to read more about the compassion grounds that enable you to access this money.

Alternatively, consider whether applying for bad credit loans through Monzi could be helpful for your tight financial situation. The Monzi network lenders understand life’s circumstances and are ready to listen to you.

What contributes to your retirement income?

There are four primary sources that you may draw from to create your retirement income. These are:

  1. Your super: Your super will likely form the bulk of your retirement income. However, there are several ways you can utilise this. Whether this means rolling your super into an account-based pension or making lump sum withdrawals.
  2. The age pension: Depending on the assets you accumulate by your retirement age, you may consider a specific portion of the age pension. How much you can access will depend on the assets you have to your name.
  3. Lifetime annuity: Lifetime income streams work by providing you with a guaranteed income stream in return for a lump sum investment.
  4. Investments: These could be any additional investment assets you own aside from an annuity, such as property or shares, that can provide you with a reasonable return.

When should you be thinking about your retirement income?

There is no right or wrong time to start thinking about your retirement and where you will get your income from. However, if you genuinely want to ensure that you will be prepared and have enough to retire with by your preservation age, it may be wise to think about it in your 30’s or even your 20’s.

Taking steps to identify how super works and which information is relevant can be a great way to safeguard your financial future. One item in particular worth considering is how you are going to bridge the savings gap. This gap essentially occurs when you rely on employer contributions alone and retire with less than the average necessary for a comfortable retirement. Therefore, you may want to consider whether or not it is worth depositing extra into your super fund at the end of each financial year. Viewing the little details like this is bound to make a difference in 30-40 years.

Future retirement income calculator

Depending on your personal circumstances, a future retirement income calculator is the same as any other retirement income calculator. If you are 55, at the peak of your financial career, and preparing to retire, it may be easier to know what to expect. However, if you are in your early 20’s on a low salary, it may be hard to predict your future retirement income.

You can still utilise a retirement income calculator. However, it may be more beneficial to you to learn the ins and outs of retirement income. Then consider getting into the habit of contributing extra to the super yearly, or bi-yearly, for example.

Retirement income calculator for couples

If you are married and settled down as a couple, you may be looking forward to a future together. For some, this could mean that your calculations for your future need to include a second income. Most retirement income calculators cater to this.

There may be an option to add your partner to your calculations. You may then need to provide your spouse’s age, salary before tax, and current super balance. If the calculator you use doesn’t have a feature to add your spouse, you could combine your information with theirs and input this more significant figure. This may help you to see an illustration of what you could jointly retire with. Use caution with this figure, as it may not be as accurate as you would like. It will be wiser to use a calculator that caters to two incomes rather than attempting to calculate the outcome yourself.

Retirement income calculator

How much income will you need?

How much income you will need will depend on the kind of retired lifestyle you would like to live. The government’s MoneySmart site has a great page called ‘how much super you need’. It illustrates how much you will need per year and per week to live a comfortable or modest lifestyle. It also shows you how this will vary depending on whether you are single or partnered.

Part of calculating your retirement income is deciding what kind of life you envision for yourself. For example, if you want to travel the world solo or with your family, you are going to need far more retirement savings than you would otherwise. The same goes for whether you would like to move or renovate the house. Considering what your retirement might consist of is a great way to help you understand what your retirement income might need to look like.

Is it smart to assume you’ll live a long life?

One of the dilemmas when using a retirement income calculator and working out what you might need to save, is how long you will live. It’s impossible to say what age you’ll live to be. No one knows this, least of all, your super fund provider. So, how do you know when is a good time for your money to run out?

Well, you just don’t. The best you can do is work out the maximum amount that you can realistically save. Then, if you live longer than you expected to, you won’t be penniless. It’s, in a sense, a gamble trying to work out how much you are going to need, when you need to access it, and how long it will last you. The best way to avoid running out of funds is to establish additional streams of income. If this is not possible for you, you may be able to instead investigate the potential of small loans through lender-finders like Monzi.

What is an age pension?

An age pension is a government payment that you may be eligible for providing the sum of your assets does not exceed the payment’s threshold. Depending on the amount of assets you have, you may be able to still receive a portion of the pension, rather than none. You can work out what you are eligible for by visiting the Centrelink site. Alternatively, you may be able to use an age pension calculator to help you work out what you qualify for.

It is possible to start your retirement on your superannuation payments and then transition into a pension as your savings deplete. This means that you will never be without some source of income. A retirement income calculator may not be able to help you with this. However, you can speak to your super fund provider for further information.

How is age pension calculated?

The age pension calculates on several factors. However, two ‘tests’ assess your wealth and therefore help estimate what you can earn on a pension. These tests are the income test and the assets test. The assets test conducts a deep dive into all the assets under your name, except your primary residence. Whether or not you are single or a homeowner will influence where the asset threshold sits.

On the other hand, the income test combines all your income sources and narrows it down to a fortnightly estimate. This includes income from any financial assets you have, such as shares, bonds, bank accounts etc. Specific rates are then applied to this to make it fair. Your pension is then decided based on whichever of the tests equals a lower pension.

How will your superannuation affect your retirement?

Depending on the amount you manage to save in your lifetime, your super could help provide you with a comfortable way of life. The more you save, the more you will have available to you. Meaning that it can be worthwhile to put away more than what your employer deposits. However, superannuation can affect your retirement income in other ways.

Your super balance, for example, is considered an asset. This means that the more you have saved, the less you are likely to obtain the age pension. Naturally, the rest of your personal circumstances will mix with this. This is as the pension is not only calculated on super as an asset. However, keep in mind that the larger your super is, the more likely you need to rely on lump payments rather than government payments.

A third thing to note is that your partner may be entitled to a portion of your superannuation. This means that if divorce is on the horizon in your senior years, you may want to consider how this might affect your savings. Also, if your partner is younger than you, their income and assets will influence how much pension you can receive once they reach the preservation age. Be aware of the effect your partner can have on your finances.

What if you need to access your super early?

There is a list of compassionate grounds that may enable you to access your super early. These include:

  • Medical treatment or transport for you or a dependent
  • Expenses associated with the death of you or your dependent
  • Making a payment on a home to ensure you don’t lose it
  • Modifying your home to accommodate you or your dependant’s disability
  • Covering Palliative care for you or your dependant

You may only be able to take a portion of your super if you find yourself in one of these positions. However, unless you are terminal, this portion will likely set you back significantly. This begs the question, can you rebuild your super after accessing it?

Yes, there may be some ways to rebuild your superannuation after accessing a portion. Typically, this will include consolidating your accounts into one fund at a reasonable rate. You will likely need to contribute extra if you ever wish to return your account balance to what it was.

What are retirement assets?

You can retire with any assets that you’d like. However, consider that the more assets you have, the less likely you are to receive a portion of the pension. Therefore, if you are an avid property investor, this is fine. You can retire and hold onto all your properties and use them as an income stream for your retirement. It just might mean that you will be sacrificing the age pension to do so.

How can you optimise your financial future?

There are a plethora of ways that you can optimise your financial future and financial wellbeing. This may be ensuring that you have a strong credit score and credit report. Maybe you create well-maintained savings and emergency savings accounts. Perhaps you consider an optimised financial future that involves a significant investment portfolio. Or, it might just mean you contribute a little extra to your super fund each year.

Regardless of the above options, reading into the opportunities and financial paths you can take is a great start. Making yourself aware of how your money can work for you, how to save, and where to invest is a great starting point. Creating the mindset that you want to look after yourself financially may be one of the best things you can do.

Is it wise to invest for retirement?

Yes, it can be smart to invest for your retirement, providing you know what you are doing and are not investing for its thrill. It is so simple to start making your money work for you in this day and age. Perhaps you want to start cryptocurrency investing, purchasing property or looking into shares and stocks. If there is potential to make returns you can then put towards your retirement.

Not only this, but it has also become even easier to double your risk and reward through an investment loan or margin loans. Investment returns can easily contribute towards your retirement income. You may or may not be able to factor your investments into the retirement income calculator. However, if you are prepared to forgo an age pension, successful investments could improve your retirement.

Loans for retirees

Sometimes, your financial situation just needs a little help. There are several ways you may go about this, such as utilising a financial advisor to help you out. Say you have verified all the payments available to you. You’ve also worked out you cannot access a Centrelink cash advance or a no-interest loan. Then perhaps personal loans can help. Monzi lenders can potentially help people from all walks of life. Whether it’s loans for people on Centrelink or pension loans, see if the Monzi lender-finder can help you.

Unlike traditional banks, most of the Monzi lenders are private lenders with more relaxed criteria. This means that a credit check doesn’t have to be the end of your application if your score is looking a little sad. Monzi lenders may do their best to hear you out and help you get the cash you need. So, if you have exhausted your options and need a bit of extra money, why not apply for a loan through Monzi today?

Monzi and retirement income

Monzi doesn’t provide a retirement income calculator. However, if you are a retiree looking to boost your retirement income, potential same day loans could help you. To get started using the Monzi lender-finder, simply click the purple ‘apply now’ button. Or, you can scroll up to our loan slider. From there, you will need to tell us a bit about yourself and what you are looking to borrow.

Once you’ve submitted your application, we’ll do the heavy lifting of finding you a lender. If you apply within business hours, we may complete this in as little as 60 minutes. Should we be successful, your lender will get in contact with you.

But wait! Don’t apply if you still have questions. Send your queries to the Monzi team; we’re waiting and happy to help. You can reach us via hello@monzi.com.au. We look forward to hearing from you!

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Example

Loan Amount of $1,000 over 6 months repayable weekly (25 weekly repayments). $1,000 (Principal Amount) + $200 (20% Establishment Fee) + $240 (fees based on 4% per month over 25 weeks) = $1,440 total repayable in 25 weekly installments of $57.60.

Under the current legislation, most small personal loan providers don’t charge an annual interest rate (you’ll know this as an APR) %. The maximum you will be charged is a flat 20% Establishment Fee and a flat 4% Monthly Fee. The maximum comparison rate on loans between $300 and $2000 is 199.43%. The minimum and maximum loan term is 12 months. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

Loan amount

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48% Annual Percentage Rate (APR)

67.41% Comparison Rate p.a.

Example

Loan Amount of $3,000 over 18 months repayable weekly (78 weekly repayments). $3,000 (Principal Amount) + $400 (Establishment Fee) + $1,379.06 (reducing interest) = $4,779.06 total repayable over 18 months with weekly installments of $61.27.

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24 months (maximum)

Costs

21.24% Annual Percentage Rate (APR)

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Loan Amount of $10,000 over 24 months repayable weekly (104 weekly repayments). $10,000 (Principal Amount) + $5,577.12 (Interest) = $15,577.12 total repayable over 24 months with weekly installments of $149.78.

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