How MyFinancialFuture works

MyFinancialFuture turns the numbers you enter into a month-by-month projection of your cash flow and net worth, out to the horizon you choose. This page explains what each screen does and — in detail — the exact logic and calculations behind the results, so you can see precisely how every figure is produced. Nothing here is a black box.

The model in one paragraph

At the centre is a single calculation, project(plan), that reads your plan and produces one row for every month from today to the end of your projection. Each row works out your income, the tax withheld, your living expenses, the cash flows of every investment you’ve added, your savings balance, your super balance, and your net worth in both today’s and future dollars. It is a pure, deterministic arithmetic model: the same inputs always produce exactly the same output. There is no randomness and no market simulation — it is a transparent projection of your stated assumptions, not a prediction.

The pages, and the sections within them

1. MyFinances — your inputs

This is the single source of truth for everything the engine calculates. It contains:

• Assumptions — your projection horizon (default 40 years), expected inflation (default 2.5% p.a.) and default annual pay rise (default 3% p.a.).
• About you & goals — your age, whether you’re single or partnered, your target retirement age, risk appetite and goals. Your age and retirement age drive the retirement and lifespan logic below.
• People & income — one or two people, each with salary (which rises each year), plus any other ongoing or one-off income.
• Expenses — living costs by category, entered in today’s dollars.
• Current savings — your liquid cash today, held as cash or in a loan offset.
• Current investments — the property, shares/ETFs, superannuation strategies and cash accounts you already hold or want to model. Each is a configurable module (see the calculations below).

2. MyFinancialFuture — your results

The live projection of the plan above. It shows:

• Net worth over time — charted in nominal (future) dollars or real (today’s) dollars via a toggle.
• Cash flow — money in vs money out, year by year.
• Milestone cards — key moments such as loan pay-off, the month your savings first turn positive, and retirement.
• The monthly ledger — every month in a table, with a column for each investment so you can trace exactly where each dollar comes from. Your residual cash balance is always shown.

3. MyFinancialOpportunities

A rules engine scans your finances for well-understood, generic improvement areas (for example: holding more cash than a sensible buffer, or being heavily concentrated in property). Each opportunity shows an estimated long-run benefit, a Wealth Impact Score, and an editable “how it’s calculated” panel so you can change the assumptions behind the estimate. Opportunities are generic information, not a recommendation that any of them suit you.

4. MyFinancialScenarios

A scenario is your current finances plus a set of strategies you choose to layer on top (e.g. add an investment property, start an ETF plan, salary-sacrifice into super). Each scenario is projected by the same engine and can be compared against your current path so you can see the difference at a glance.

5. AI Analysis

For a chosen scenario, the tool builds a compact, anonymised summary of the projected outcome (your labels are stripped and dates become month offsets — the full plan never leaves your browser) and asks an AI model to explain it in a few plain-English sentences: what it is, the benefits, the risks, and how a specialist could help. The AI can only describe configurations of the built-in modules. It is filtered so it never names real products, funds or tickers and never uses advice language, and every dollar figure it cites must trace back to the projection.

6. Export

Download any scenario’s full month-by-month projection as CSV or (for Pro) XLSX and PDF, or export your entire plan as JSON to re-import later. Every export carries the same general-information disclaimer.

The calculations, step by step

Each month, the engine runs the following in order. All money is held internally as whole cents to avoid rounding drift.

Time & the date spine

Month 0 is today (your plan’s base date). Every value is indexed by month number. Annual events — pay rises, the end-of-financial-year tax reconciliation, and rental yield re-evaluation — fire on their anniversaries relative to that spine.

Income

Salary is annualised and grown by your pay-rise rate once per year: salary = starting salary × (1 + pay rise)^(years elapsed). Other ongoing income and one-off amounts are added in the months they apply. Salary stops at your retirement age; other (non-salary) income continues unless you give it an end date.

Tax — PAYG each month, reconciled each July

Each month, tax is withheld on your salary using the current Australian resident income-tax brackets plus the Medicare levy (PAYG approximation). On 1 July each year the engine runs a full end-of-financial-year reconciliation:

• It computes the actual tax on your taxable income — that is, assessable income (salary, rent, distributions, capital gains) minus deductions (negative gearing on property, debt-recycling interest, etc.).
• It subtracts any franking credits from dividends.
• The difference between that actual tax and what was withheld during the year becomes a refund or bill, applied in the following month’s cash flow.

A recurring refund usually means you’re negatively geared (deductions reduce your tax below what PAYG withheld); a recurring bill means investment income on top of salary. The first, partial financial year is skipped so it doesn’t produce a spurious adjustment.

Capital gains

When an asset is sold, the net capital gain is added to that year’s assessable income. If it was held for at least 12 months, the 50% CGT discount applies to the gain first.

Expenses & inflation

You enter expenses in today’s dollars. Each month they’re inflated to future dollars: expense = today’s budget × (1 + inflation ÷ 12)^(month). From retirement onward, total expenses are scaled by your retirement-expenses percentage if you set one.

Superannuation

While you’re working, super grows each month by the fund return plus contributions: balance = balance × (1 + fund return ÷ 12) + (salary × SG rate ÷ 12), where the Super Guarantee rate follows the legislated schedule (11% → 11.5% → 12%). Salary sacrifice adds to this and reduces your taxable salary. The default fund return is 7.5% p.a. In retirement, super is drawn as a planned, inflation-indexed pension sized to run the balance down to about $0 by your end-of-life age. Crucially, you can’t access super before the preservation age of 60: if you retire earlier, super keeps earning but is held untouched until 60, and cash and other investments fund the gap. Any balance left at the end-of-life age is realised into your estate (savings) rather than vanishing.

Property

• Loan — principal & interest: interest = loan balance × rate ÷ 12, and principal paid = repayment − interest, so the balance amortises to about zero by the end of the term. (Interest-only is also supported.)
• Value — compounds monthly at the growth rate: value = value × (1 + growth ÷ 12).
• Buying costs — stamp duty (state-by-state tables), lenders mortgage insurance and conveyancing apply only to a prospective purchase. A property you already own is charged no acquisition cost.
• Rent — weekly rent becomes annual income; the yield is re-evaluated each anniversary against the current value, less a vacancy allowance.
• Deductions — loan interest + property management + insurance + council rates + maintenance + depreciation (building depreciation ≈ 2.5% × construction cost ÷ 12 per month). These flow into the EOFY reconciliation as negative gearing.
• Usable equity — 0.8 × value − loan balance.
• Buying a home to live in — when you model an owner-occupied purchase, your Rent expense automatically stops from the purchase month (you own, so you no longer rent); the mortgage and ownership costs are modelled on the property instead.

Defaults: 20% deposit, 30-year term, 6.5% interest, 4% capital growth, ~3% rental yield, NSW — all editable per property.

Shares / ETFs & debt recycling

• Contributions — a regular dollar-cost-averaging amount over a window you choose.
• Growth — the holding compounds at its capital-growth rate, reduced by the fund management fee (MER). The default is 6% capital growth + 4% distributions (≈10% total nominal, the long-run historical broad-equity figure), with a 0.17% MER.
• Distributions — paid out as cash (or reinvested), grossed up for franking: franking gross-up = distribution × franked % × 30 ÷ 70. The franking credit then offsets tax at the EOFY reconciliation.
• Debt recycling — a split investment loan funds the holding; that loan’s interest is tax-deductible, and the model tracks the line balance, the portfolio value and the franking credits separately.

Cash & offset accounts

A high-interest or term-deposit balance earns interest as income. An offset balance instead reduces the interest charged on its linked loan, rather than earning interest itself.

How retirement is funded

In retirement, expenses are covered in this order:

1. Before preservation age (60): super is off-limits, so cash savings fund expenses, then shares/ETFs you’ve opted in to draw down (each partial sale triggers CGT).
2. From age 60: your tax-free, inflation-indexed super pension is the primary income. If it more than covers expenses, the surplus banks to cash; if it falls short, the gap is met from cash, then drawable ETFs.

If every source is exhausted, your cash balance goes negative — the model’s honest way of showing you’ve run out of money (this is what the Yes/No verdict on your results flags).

Lifespan: where the projection stops

The projection ends at your modelled end-of-life age (100), even if your chosen horizon is longer. This prevents the model from compounding wealth for decades after death — money no living person would ever hold — which would otherwise badly distort the headline net worth. Any super remaining at that point is realised into your estate so net worth stays continuous to the final month.

Net worth: nominal vs real

Net worth = cash + super + investment values − loan balances. That’s the nominal figure. The real figure restates it in today’s purchasing power: real = nominal ÷ (1 + inflation ÷ 12)^(month). Real net worth is the more honest gauge of whether you’re actually getting wealthier, because it strips out inflation.

Determinism

The whole engine is a pure function with no randomness, no network calls and no hidden state. Re-running the same plan always gives byte-for-byte identical results, and the calculations are validated against fixed “golden” reference figures and property-based tests on every change.

Key default assumptions

Every one of these is editable in your plan. The defaults are starting points, not advice.

What the model deliberately does not do

• No market simulation. Returns are steady annual assumptions, not random or sequence-of-returns scenarios. Use Scenarios to test different rates yourself.
• No Age Pension or Centrelink means-testing, and no aged-care modelling.
• Simplified super rules. Super is held until the preservation age of 60 and then drawn as a tax-free pension (the over-60 account-based pension treatment). The model doesn’t cover transition-to-retirement pensions, the tax on any pension taken between 55 and 59, or the legislated minimum drawdown percentages.
• Approximate, point-in-time tax and state rules. Brackets, stamp duty and similar are based on published rates and may lag legislative change.
• No product recommendations. It models generic, configurable building blocks — never a specific fund, lender, share or super product.

For more on what the tool is and isn’t, see About, and how your data is handled in our Privacy Policy.