Knowledge base
Learn the concepts
Plain-English explainers for the ideas behind the numbers — how the Age Pension is calculated, what a safe withdrawal rate is, how Monte Carlo and the stress test work, and more. Search a keyword or browse by topic. Each concept links to a live example you can open and change.
25 concepts
Age Pension
The Age Pension: who gets it and when
A means-tested government payment from Age Pension age (67). Most retirees get at least a part pension, and it grows as you spend your savings down.
How the Age Pension is calculated (income & assets tests)
Two tests run in parallel — an income test and an assets test — and you're paid the lower result. Each starts from the maximum pension and tapers it away.
Aged care
Aged care in Australia: costs, funding and the means test
A complete guide to paying for aged care in Australia — the two types of care, the four residential fees, the RAD-vs-DAP room decision, the means test, and how it all flows through to your retirement plan and your estate.
What aged care costs: the fees explained
Residential aged care has four fees — a flat basic daily fee plus three means-tested charges — while clinical care is free. Here's each one, and what the acronyms mean.
Paying for aged care: RAD, DAP and the family home
Two decisions drive the whole picture — pay the room as a lump sum (RAD) or a daily charge (DAP), and sell or keep the family home. Both interact with the Age Pension. A worked example.
The aged-care illiquidity trap: house-rich, cash-poor, and no pension
Keeping the family home during residential care can leave you with wealth you can't spend — savings drained by fees while a home you can't touch counts against the Age Pension, cutting the safety net exactly when you need it.
Spending & withdrawal
Safe withdrawal rate (SWR) & the 4% rule
The most you can draw each year and still be very likely to last. The famous '4% rule' is a US starting point — Australia's Age Pension usually lets you draw more.
Flexible SWR & Guyton-Klinger guardrails
If you're willing to trim spending a little after bad markets (and can spend more after good ones), you can start from a higher withdrawal rate. That's the flexible SWR.
What 'flexible spending' means
Spending that responds to your portfolio instead of a fixed amount every year — the single biggest lever for surviving bad markets.
Drawdown order & the minimum drawdown
In retirement the planner spends outside-super savings before super (it's more tax-efficient), after taking the legislated minimum super drawdown.
Failsafe withdrawal rate
The withdrawal rate that would have survived even the single worst starting year in recorded history — the most cautious possible spend.
Risk & simulation
Monte Carlo simulation & the 'likelihood' figure
The 'X% likely to last' number comes from running your plan through thousands of random market paths, not a single smooth return.
Sequence-of-returns risk & the historical stress test
The order of returns matters, not just the average. A crash early in retirement is far more dangerous than the same crash later — the stress test replays real history to show it.
Survival-weighted outcomes ('Rich, Broke or Dead')
A run-to-90 test treats every late shortfall as a failure — but you might not live that long. Survival weighting blends 'will it last?' with 'how likely am I to still be here?'
Super, tax & contributions
Super vs outside-super savings (and how each is taxed)
Super in pension phase is tax-free; savings outside super are taxed on their earnings. That difference drives where you hold money and which you spend first.
Contribution caps & salary sacrifice
You can add to super pre-tax (concessional) or after-tax (non-concessional), each capped per year. Salary sacrifice is the main lever to build super faster.
Recontribution: turning taxable super into tax-free
Withdraw a lump sum from super after 60 and put it straight back as an after-tax contribution. It doesn't change how much you have — it converts the 'taxable' part of your super into the 'tax-free' part, which mainly cuts the tax your beneficiaries pay when you die.
The Transfer Balance Cap (tax-free super limit)
There's a lifetime limit on how much super you can move into a tax-free pension. Above it, the excess stays in accumulation and its earnings are taxed at 15%.
Super fees and why they matter
A percentage fee quietly reduces your return every year and compounds over decades. The planner models fees explicitly because they're often the biggest gap in a forecast.
LITO & SAPTO: the offsets that keep retirees' tax low
Two tax offsets — the Low Income Tax Offset (for everyone) and the Seniors and Pensioners Tax Offset (from Age Pension age) — cut the tax you owe. Together with the tax-free threshold and tax-free super, they're why most retirees pay little or no income tax.
Transition to Retirement: same take-home, more super, less tax
From age 60 you can salary-sacrifice more and draw a tax-free TTR pension to replace the pay you give up — shifting income from your marginal rate down to super's 15%. Your take-home holds; the tax you save builds super.
Other income streams (DB pensions, annuities, foreign pensions)
Lifelong income outside super — a defined-benefit pension, annuity, or foreign pension like US Social Security — modelled as a first-class source that offsets your drawdown.
Non-resident (foreign resident) tax
If you retire permanently overseas, Australian tax works differently — no tax-free threshold, only Australian-sourced income is taxed, and the Age Pension generally can't be claimed from abroad.
How the model works
Preservation age & the early-retirement bridge
Super unlocks at 60 (preservation age) but the Age Pension starts at 67. Retiring earlier means funding the gap from savings outside super.
Today's dollars (real vs nominal)
Every figure is shown in today's purchasing power, so $50,000 in 30 years means what $50,000 buys now — not an inflated future number.
Prefer quick answers?
The FAQ covers common questions in a sentence or two. Or jump straight into the free planner to see your own numbers.