How this is worked out
The opening balance grows on its own:
A = P(1 + r/n)^(nt)
where P is what you start with, r the annual rate, n the compounding periods per year and t the years. Contributions grow separately from the date each one arrives — the future value of an annuity:
FV = C · ((1 + i)^m − 1) ÷ i
The calculator walks the balance period by period instead of applying the closed forms, which keeps fortnightly contributions against monthly compounding exact rather than approximate. Fortnightly is worth selecting if that is how you are paid: super guarantee contributions arrive with your pay, not in a single annual lump.
The real-terms figure divides by (1 + f)^t. The Reserve Bank targets 2–3% inflation, so the 2.75% default sits mid-band rather than at the optimistic end.
A worked example
- Starting amount
- $15,000
- Added each month
- $600
- Return / term
- 7% over 25 years
- Total paid in, including the start
- $195,000
- Growth on top
- $376,924
- Final balance
- $571,924
- In today’s money at 2.75%
- $290,264
Super is compounding you are already doing whether you notice or not
The superannuation guarantee means a percentage of your ordinary earnings goes into super every pay cycle, for your whole working life, invested and untouched for decades. It is the single largest compounding exercise most Australians will ever run, and it happens by default.
Because it runs for so long, small differences matter enormously. A fund returning 7% instead of 6% over a forty-year career produces roughly a third more at the end. So does one charging 0.6% in fees instead of 1.6%. Both of those are choices, and both are usually made once and never revisited.
The other default worth checking is the investment option. A large number of members sit in a balanced or conservative option they never selected, decades from retirement, when a growth option would have been more appropriate for the timeframe. The projection here is only as good as the return assumption, and the return assumption follows from the option.
Salary sacrifice, and the 15% concessional rate
Concessional contributions — the super guarantee plus anything you salary sacrifice — are taxed at 15% going into the fund, rather than at your marginal rate. On a 37% marginal rate that is a 22 percentage point saving on every dollar contributed, applied before the money starts compounding.
That uplift is the equivalent of several years of investment return, obtained instantly. The trade is access: the money is preserved until you reach your preservation age, which for anyone working today is 60.
Earnings inside super are taxed at 15% too, and at zero in the retirement phase, so this calculator’s untaxed projection is closer to accurate inside super than outside it. Outside, income and realised gains are taxed at your marginal rate, with a 50% CGT discount on assets held over twelve months.
The crossover year, and why starting beats optimising
The calculator names the year growth first exceeds your total contributions. On the worked example it lands in year seventeen. Everything before that looks flat and disappointing, which is when most people conclude nothing is happening.
Someone contributing from twenty-five to thirty-five and then stopping entirely usually ends with more at sixty-five than someone contributing from thirty-five to sixty-five. The first person contributed for ten years, the second for thirty. Time in the market is doing the work, and it is the only input that cannot be increased later.
Fees compound against you at the same rate
A 1% annual fee removes roughly a quarter of the final balance over twenty-five years, and closer to a third over forty. It is charged on the entire balance every year, including on the growth that previous years’ growth generated.
Compare the total: administration fee, investment fee, and any percentage-based adviser fee. Many funds now offer indexed options under 0.20%. To model the effect, subtract the fee from the return — 7% less 1% is 6%, which on the example above takes the final balance from $571,924 to $482,771. That is a larger difference than almost any contribution increase you were considering.
Assumptions and sources
- Compounding formula
- Standard compound interest with periodic contributions, walked period by period. Verified in tools/test/finance.mjs.
- Inflation adjustment
- Real value = nominal ÷ (1 + inflation)^years. The RBA targets 2–3% inflation over the cycle.
- Super tax treatment
- Concessional contributions and fund earnings taxed at 15%; earnings in retirement phase generally untaxed. Caps and rates are set by the ATO and change. checked 2026-08
- Default return
- A long-run real return assumption for a growth-oriented portfolio. A default, not advice; past performance is not a forecast.