Why Almost All Retirement Calculators Get the Age Pension Wrong

You punch your super balance into three different retirement calculators.

One says you can draw $85,000 per year. Another says $60,000. A third says $55,000.

Which one's right?

Probably none of them.

The Research: 77% of Calculators Get Age Pension Wrong

A landmark investigation by Super Consumers Australia (SCA) exposed systemic problems in retirement calculators that persist across the industry today. Their key findings:

• No calculator tested achieved 100% accuracy in Age Pension modeling
• 77% produced results that were too high or too low
• Common failures included outdated deeming rates, missing asset/income test interactions, and incorrect couple vs single modeling

The report's conclusion: none of the calculators tested could be relied upon for precise Age Pension estimates.

Why Age Pension Modeling Fails

Based on SCA's research, calculators are inaccurate because they:

1. Use Simplified or Outdated Deeming Rates

Centrelink doesn't care what your actual investment returns are. They apply deeming rates to your financial assets for means testing. Many calculators use simplified deeming assumptions or fail to update when rates change.

If 1973-74 happened today: when your actual portfolio return was -26.5%, current Centrelink rules would still deem your assets to earn a positive return. This affects pension eligibility calculations year-by-year.

2. Ignore Asset Test vs Income Test Interactions

The Age Pension applies both an asset test and an income test. You receive the lower of the two results. As you draw down super, your assessable assets decrease (improving asset test results) while deemed income may change (affecting income test results).

Many calculators don't model this dynamic correctly, leading to inaccurate pension estimates over time.

3. Don't Model Couple vs Single Rules Correctly

Singles and couples have different thresholds, different taper rates, and different pension amounts. Some calculators apply the wrong rules or use generic assumptions that don't match your actual situation.

4. Assume Linear Drawdowns

Real retirement doesn't follow a smooth line. Markets crash. Inflation spikes. Pension entitlements change as your super balance changes. Linear projections miss these interactions.

The 1973 Test: What Accurate Modeling Looks Like

Let's use real data to show what these modeling failures mean.

$1,000,000 in super. Single, homeowner, 67 years old. 60% growth / 40% bonds allocation (as one example). Retiring in 1973 (one of the worst historical periods due to stagflation).

Note: Our calculator supports multiple asset classes including Australian shares (ASX), international shares (MSCI), US shares (S&P 500), bonds, cash, and property. The 60/40 allocation shown here is just one example.

Question: What's the maximum sustainable income for 30 years?

Same person. Same super balance. Same market conditions. Accurate Age Pension modeling nearly doubles the sustainable withdrawal rate.

This is the real cost of calculator inaccuracy.

What Accurate Modeling Looks Like

Let's zoom into year 10 of the 1973 retirement (1982) to see how detailed modeling works:

• Super balance (real terms): $329,262
• Portfolio return (1982): +11.9% nominal
• Super withdrawal: $33,094
• Age Pension payment: $30,480
• Total income: $63,574 (real terms)

Notice the balance: as assets decrease, pension increases. The total income stays constant in real terms ($63,574), but the composition shifts year by year based on actual Centrelink rules.

This is what year-by-year modeling looks like. Not a simple formula. Actual calculations that account for every interaction.

The Real-World Impact

If you're planning with an inaccurate calculator:

If it overstates your income: You'll overspend early in retirement. By the time you realize the mistake, you've locked in a lower Age Pension due to gifting rules and irreversible asset depletion.

If it understates your income: You'll underspend and die with money you could have enjoyed. Or you'll work longer than necessary.

Both are bad outcomes.

Not Just 1973

The 1973 scenario is a stress test. But the principle applies to every retirement year.

The Age Pension is Australia's retirement safety net. For most retirees, it's a significant part of total income. Whether you retire in a boom or a crash, accurate modeling matters.

Test Your Own Scenario

Our Advanced Calculator provides:

• Year-by-year Age Pension calculations using current Centrelink means testing rules
• Accurate modeling of both asset and income tests for individuals and couples
• Deeming rate application for asset and income tests
• Tax calculations on super withdrawals and other income
• Historical backtesting against every retirement year since 1928
• Rolling period analysis to find your worst-case scenario

Our commitment to accuracy: We update Age Pension rates, thresholds, and rules on a weekly basis to ensure complete accuracy and ASIC compliance. Our modeling accounts for both asset and income tests, correctly applies couple vs single rules, and reflects current Centrelink assessment methodology.

What SCA Found No Calculator Does

The Super Consumers Australia research identified two critical modeling failures that no calculator tested implemented correctly:

1. Dynamic interaction with super drawdowns: Most calculators assume fixed drawdown patterns, which breaks the asset test over time. Our calculator recalculates your assessable assets every year as your super balance depletes.

2. Year-by-year recalculation: No calculator tested dynamically recalculated assets, deemed income, taper rates, and test selection for each year of retirement. Our Advanced Calculator does this automatically, modeling how your Age Pension entitlement changes annually based on your actual super balance and withdrawals.

This is why we can show you the $27,702 difference in the 1973 scenario with precision. The Age Pension starts at $0 (too much in assets), increases to $30,480 by year 10 as the super balance drops to $329,262, and provides over $33,000/year by year 26.

Put in your age, super balance, and desired retirement age. Run it against 1973. Then run it against 1929, 2008, and today. See how the Age Pension changes your sustainable income in each scenario.

That's the difference between guessing and knowing.