Retirement Calculators Tested And Reviewed

This month we tested free online retirement calculators to find the one that gave the most accurate results.

The results were surprising with some calculators inflating results, while others failed to include significant retirement income sources.

The Problem With All Retirement Calculators We Tested

Online calculators attempt to simplify a complex area of financial planning. The problem we found was that the assumptions required to simplify a retirement simulation can dramatically overstate (or understate) your retirement position.

Inaccurate financial calculators create a false sense of security that causes consumers to delay receiving financial advice until it’s too late.

The fewer questions a calculator asks, the more assumptions it must make, which means less accurate results.

If you want an accurate retirement projection, then request a free consultation with one of our retirement planning specialists who can project your retirement position and then provide strategies to help you maximise your situation.

Our Scoring Criteria

We wanted to see retirement calculators that included:

• Superannuation and non-superannuation income and assets
• Debts
• Calculation for singles and couples
• Lump sum purchases (such as a holiday or new car) before or during retirement
• Control over assumptions like inflation, investment returns and fees
• Simple to use and visually pleasing interface
• Accurate age pension entitlements
• Ability to transition into retirement

AMP My Retirement Simulator

Amp’s calculator scored highly against our criteria because it included superannuation and non-superannuation assets together with one of the more accurate age pension calculators.

One of the best features of this calculator is the ability to project ‘what if’ situations. For example, if want to see the impact adding an extra $1,000 into super, or retiring one year later, then simply adjust the inputs and the graph instantly updates. You can also adjust market conditions, income in retirement and salary sacrifice.

The gap with this calculator is that it assumes you are employed and receive 9% superannuation guarantee contributions from your employer. If you are self-employed this will overstate your superannuation at retirement.

Cons:

• No transition to retirement calculator
• Assumes 9% Superannuation Guarantee on salary

Australian Super Retirement Income Calculator

Australian Super have created a good retirement calculator for simple situations. The results page is customisable allowing you to change your retirement age, income needs and contributions.

Unfortunately, the calculator does not allow for lump sum purchases and the results chart is visually challenged.

Cons:

• No lump sum purchases
• No transition to retirement calculator
• Assumes 9% Superannuation Guarantee on salary

MLC Superannuation Calculator

This poorly names ‘superannuation calculator’ actually calculates your retirement income including non-superannuation assets, but makes no provision for age pension entitlements. The questions are more advanced than other calculators and it includes the ability to transition to retirement.

The calculator also allows you to run ‘scenarios’ to chart the impact of making additional superannuation contributions.

Cons:

• No age pension
• No lump sum purchases

MoneySmart Retirement Planner

We expected more from the Government’s MoneySmart calculator. Firstly, the calculator is called a ‘retirement planner,’ but doesn’t consider non-superannuation assets. Secondly, the age pension calculation is inaccurate because non-super income and assets are not counted toward the age pension entitlements test.

One thing this calculator does well is allows users to alter the superannuation Guarantee contribution rate, rather than assuming 9%. This is useful for self-employed people and those who receive higher SG contributions.

Cons:

• Age pension overstated
• No lump sum purchases
• Non-super assets not counted

Vanguard Retirement Tools

Vanguard have produced an easy to use and visually pleasing retirement simulator. The inclusion of a transition to retirement calculator is a nice bonus.

Unfortunately, non-super assets are excluded, so are lump sum purchases. Like the MoneySmart calculator, the age pension entitlements are overstated because non-superannuation assets are not considered.

Cons:

• Age pension overstated
• No lump sum purchases
• Non-super assets not counted

Smart Pension

This calculator asks too few questions to provide any useful information. It simply projects your superannuation balance only and does not include any non-super assets or age pension entitlements in the calculation.

Cons:

• Many: Only useful if you want to project your superannuation balance, otherwise avoid this basic retirement calculator.