Investments Balance

  • How does the model distinguish between a client who has $500,000 in cash (say term deposit) and a client who has a High Growth share portfolio of the same amount?  Or a client whose superannuation is invested in a Reference Model that is different to their Investments Balance?
  • Your Best Life applies one risk profile (selected by the advisor and customizable to your practice’s risk profiles and cap market assumptions) to all super and investment assets. 
  • Your Best Life assumptions and limitations table are available in the module by clicking on the tab below the Run projection. 


  • How is Household expenditure calculated? Is it simply Client / Partner Income less Household Savings? 
  • How is Salary Sacrifice or PDC’s accounted for in this equation?
  • The model assumes unless you tell it otherwise, that the client is spending every dollar of their income. So when a base case is run, Best Life will assume the client is spending every dollar of the income available to them.
  • For example, if a Household income adds up to $100k and the client is saving $10k, Your Best life calculates the household expenses to be $90k. 
  • It is within the allocation strategies that you can then allocate where this $10k savings goes to. 


  • Salary sacrifice isn’t accounted for in Your Best Life. To model this you can use the allocation strategy to show an amount that is going towards “invest” to show the contribution. This means you will need to have an “income saved amount” which is best done by reducing their household expenses column. 
  • To account for any tax savings, you can dial down the tax rate to model the tax saved due to salary sacrifice. 

Investment Property

  • How does the model account for an Investment Property that is not Income Producing (e.g. a holiday home or untenanted property)?
  •  And similarly how is the related debt treated (i.e does it assume it’s tax deductible)?
  • Based on our assumptions the capital growth is modelled for both the client's home and any investment properties. To have the capital growth rate applied, you can capture the Investment property under the Investment Properties Total Value and input $0 for the income. However, if you do not want the capital growth rate applied then the property would be considered an asset and captured in the personal assets under the Household financials. unnamed__6_.png
  • Your Best Life currently doesn’t treat any debt as tax deductible. At this stage, we don’t have a specific input for specific investment debt

Home Loan rates 

  • How are loan interest rates incorporated, including the effect on cash flows of rate changes?
  • Currently, Your Best Life does not incorporate interest rates.  If you are seeking to model a rate change and the impact on cash flows, you can use the scenario comparison and model an assumed rate increase in expenses in the client's cash flows. 

Early Retirement 

  • How do you model a client's situation whereby they are not accessing their superannuation at the point of retirement (e.g  They are retiring prior to meeting a Condition of Release, or alternatively, they do not plan on commencing an account-based pension at the point of retirement)?
  • This would be managed by adjusting the retirement age to the age the client is seeking to retire in the retirement information. This will assume that the client is retiring at this age and the working income ceases, although they need to required income captured in the Required Retirement Income field. To fund this income it will pull the deficit from where you have told this deficit to come from in the allocation strategies. Which wouldn’t be from superannuation, so it would have to come from other investments. Your Best Life does not have rules and assumptions built in regarding a condition of releases. You would need to ensure that you do not have an allocation strategy coming from the superannuation if they have not met a condition of release.unnamed__7_.pngunnamed__8_.png

Transfer Balance Cap 

  • How does the best life model account for Total Super Balance e.g if the TBC is exceeded, or if the client is in receipt of a Defined Benefit pension (with TSB implications)?  
  • This is beyond the scope of Your Best Life. We don’t take into account transfer balance caps automatically. This is possible to model by making a lump sum contribution manually through the cash flow table.unnamed__9_.png

Foreign Retierment Funds 

  • How can foreign superannuation interests be incorporated into the model?
  • This is currently not an input in Your Best Life. You could include the foreign superannuation interest as investable assets and have these treated the same as others. However, we understand this may not be ideal. 

 Tax residency changes 


  • How can you model a client scenario in which their tax residency changes (e.g. a returning expatriate, or an outbound expatriate moving offshore for a period of time)? 
  • Your Best Life uses an average tax rate that is applied to the whole scenario, not specific years. Although, this can be broken down into pre and post retirement.  



  • How can I incorporate risk/insurance into the modelling to see the impact of premiums on cash flows? 
  • How can I compare the holding cover both inside and outside of super?
  • To understand the effects of premiums on cash flows, this would be included as an expense.
  • To compare holding the cover inside and outside of super, the advisor would need to calculate this outside of the best life tool. From here you can increase expenses in Your Best Life to show the inclusion of premiums. 
  • You can use the superannuation fees input to include any premiums deducted from super.

Tax rates 


  • The income to be entered into the Best Life tool is a gross figure. Within the Best Life tool, the tax is automatically calculated (similar to inflation). 
  • We calculate the tax rate to be applied (this is based on both pre and post-retirement) and also offset based on the types of investments that are held. 
  • The tax rate is then applied:
    • to the amount earned by investments (as well as inflation)
    • to the shortfall strategy - capital gain on selling investment property
  • We also apply tax (as required):
    • super earnings
  • We’re not currently treating tax beyond that. 
  • The household surplus figure (column K in the household cash flow table) is assumed to be post-tax.

Why might the pessimistic scenario be above the likely scenario in certain cases?

Shouldn’t it always fall between the best and worst-case scenarios?

Best Life’s cashflow modeling begins with your current financial status and projects possible financial scenarios up to the age of 105. It focuses particularly on the year when all members of the household are expected to reach their life expectancy, determining pessimistic, likely, and optimistic financial outcomes based on the 20th, 50th, and 80th percentiles, respectively.


Sometimes, this method can produce counterintuitive results, such as the pessimistic scenario projecting higher cashflows than the likely scenario at certain points. This happens because each scenario traces a unique pathway through time. For instance, the pathway leading to what we label as the “pessimistic” outcome might initially experience unexpectedly high returns, followed by a series of low returns. Similarly, the “optimistic” pathway might have its own ups and downs.

It’s crucial to understand that these percentiles (20th, 50th, and 80th) represent potential long-term outcomes based on different levels of risk and return. The pathways plotted from today to the endpoint are illustrative, showing possible ways these outcomes might be achieved but are not forecasts set in stone.

In a non-Monte Carlo approach, each period would have a defined good, bad, and expected return, which would make the outcome trajectories more predictable and consistently aligned from worst to best. However, our Monte Carlo approach provides a more dynamic and realistic range of potential outcomes, reflecting the uncertainty inherent in financial markets.

We do have the option within our model to evaluate the 20th, 50th, and 80th percentile outcomes for each period, rather than just following the exact pathway that was initially calculated. However, while this approach might create a more visually pleasing chart, it can make the underlying report data difficult to reconcile manually, as the report is an exact output of the “likely” pathway that was modelled.




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