Methodology
Independent Means is a deterministic, rules-based financial modelling tool. Every projection is calculated from the Australian tax, superannuation, and social security figures below — the same constants the running application uses, not separately maintained copies. No large language model or generative AI produces, estimates, or adjusts any number shown to you. This is a deliberate design decision: AI-generated financial output risks being construed as personal financial advice, which this tool is not licensed to provide. For what each stage of the wizard asks for and what your results mean, see the FAQ page.
Income tax brackets
Resident individual income tax rates for FY2026-27:
| Taxable income | Rate |
|---|---|
| $0 – $18,200 | 0% |
| $18,200 – $45,000 | 15% |
| $45,000 – $135,000 | 30% |
| $135,000 – $190,000 | 37% |
| $190,000+ | 45% |
The Low Income Tax Offset (LITO) provides up to $700, phasing out between $37,500 and $66,667 of taxable income. The Medicare Levy is charged at 2% of taxable income, shading in from $28,011.
Source: Australian Taxation Office individual income tax rates; budget.gov.au Stage 3 tax cuts.
Medicare Levy Surcharge
Applies when an individual has no hospital-level private health insurance. Independent Means models thresholds of $105,000 (1%), $123,000 (1.25%), and $164,000 (1.5%) for singles, with a combined family threshold of $210,000 plus $1,500 per dependant child.
Source: Australian Taxation Office — Medicare Levy Surcharge thresholds.
Superannuation
Independent Means models the Superannuation Guarantee rate at 12% of ordinary time earnings. The concessional (pre-tax) contributions cap is $32,500 per person for FY2026-27, taxed at 15% inside the fund. The non-concessional (after-tax) cap is $130,000 per person — always four times the concessional cap. Superannuation can generally be accessed from age 60 (preservation age).
The general Transfer Balance Cap — the limit on how much can be moved into the tax-free retirement (pension) phase — is modelled at $2,100,000 for FY2026-27. Balances above this cap remain in the accumulation phase, where earnings are taxed at 15%.
An additional Division 293 tax of 15% applies to concessional contributions once combined income and concessional contributions exceed $250,000.
Source: Australian Taxation Office — superannuation contribution caps and Transfer Balance Cap; Treasury Laws Amendment (Better Targeted Superannuation Concessions) Act.
Account-based pension minimum drawdown rates
Once in pension phase, super funds must draw down at least the following percentage of the account balance each year, based on age:
| Age | Minimum drawdown |
|---|---|
| 55 – 64 | 4% |
| 65 – 74 | 5% |
| 75 – 79 | 6% |
| 80 – 84 | 7% |
| 85 – 89 | 9% |
| 90+ | 14% |
Source: Superannuation Industry (Supervision) Regulations 1994, Schedule 7 — standard (non-COVID-relief) rates.
HECS/HELP compulsory repayments
Since 1 July 2025, HELP repayments are calculated on a marginal basis — like income tax brackets, each dollar within a band is charged at that band's rate, rather than one flat rate applying to the whole income once a threshold is crossed. Independent Means models the FY2026-27 thresholds as follows:
| Repayment income | Repayment |
|---|---|
| $0 – $69,528 | Nil |
| $69,528 – $129,717 | 15% of the amount over $69,528 |
| $129,717 – $186,050 | 17% of the amount over $129,717 |
| $186,050+ | 10% of total repayment income (flat, not marginal) |
Source: Australian Taxation Office — study and training loan repayment thresholds and rates.
Age Pension
Independent Means models Age Pension eligibility from age 67. The maximum annual rate modelled is $28,514 for a single person and $43,022 combined for a couple. Entitlement reduces under an assets test (tapering at approximately $78 per year for every $1,000 of assets above the relevant free area) and an income test (reducing at 50% for every dollar of income above $5,512 single / $9,672 couple), with the lower of the two results applying.
These figures are illustrative and indexed twice yearly by Services Australia — actual entitlement is always assessed individually.
Source: Services Australia — Age Pension rates, assets test, and income test.
What this tool does not model
In the interest of transparency: tax brackets are not inflation-adjusted forward over multi-decade projections; the 15% super earnings tax in accumulation phase is implicit in the return assumption rather than separately modelled; property sale capital gains tax uses a flat marginal-rate estimate rather than your specific bracket in the sale year; and Age Pension figures do not capture every means-test nuance (deeming rates, gifting rules, or homeowner status edge cases). These are documented limitations of a modelling tool, not personal financial advice.
Frequently asked questions
Does Independent Means use AI to calculate my projections?
No. Independent Means uses a deterministic, rules-based calculation engine — the same tax brackets, superannuation caps, and Age Pension formulas published by the ATO and Services Australia. No large language model or AI system generates or estimates any figure shown.
Is this personal financial advice?
No. Independent Means is a modelling tool that provides general information only, based on the inputs you enter and standard assumptions. It does not consider your full personal circumstances and is not a substitute for advice from a licensed Australian financial adviser (AFSL holder).
What superannuation concessional contributions cap does Independent Means use for FY2026-27?
Independent Means models the FY2026-27 concessional contributions cap as $32,500 per person, with a non-concessional cap of $130,000 (four times the concessional cap).
What investment return does the base-case scenario assume?
Every new model starts on the ASIC default assumption set: wage inflation of 3.7% and CPI of 2.5%, prescribed by ASIC Instrument 2022/603, with a 6.5% investment return that is our own assumption. Two alternatives sit alongside it: Conservative (5.5% return) and Aggressive (7.5% return). Every scenario converts future dollars to today's dollars the same way, deflating by wage growth during the accumulation phase and by CPI during retirement, with only the rates differing. That matters for comparison: when scenarios each used a single inflation rate of their own, most of the apparent gap between them came from the deflator rather than from the market assumptions being compared.
What Age Pension rates does Independent Means model?
Independent Means models the single Age Pension rate at $28,514 per year and the combined couple rate at $43,022 per year, with eligibility from age 67.
How does Independent Means calculate my super balance at retirement?
It projects your current balance forward year by year, adding employer Super Guarantee contributions and any salary sacrifice (net of the 15% contributions tax), and compounding at the selected scenario's return rate — the same account-based projection method a superannuation fund's own retirement calculator would use, using the current caps and rates listed on this page.
General information only. Not personal financial advice. This page and the Independent Means calculation engine do not take into account your personal objectives, financial situation, or needs. Consult a licensed Australian financial adviser (AFSL holder) before making financial decisions.