Transitions Module

Transitions Module

The transitions module is a complete transition to retirement optimization tool.
It determine the optimal level of pension income and additional superannuation contribution levels required to provide your clients with the maximum increase in total superannuation benefits.
It compares your clients current situation with your recommended transition to retirement strategy, thus providing a reasonable basis for recommending the strategy. 
Functionality includes: 
  1. Model the benefits of a TTR strategy for an individual client 
  2. Perform super and pension platforms comparison 
  3. Create quick reports for pension and super platforms
  4. View projections for existing cashflow, existing super projections, recommended cashflow and recommended super projections. 

Accessing the Transitions Module 

To access the module go to the main menu (1) > Modelling (2) > Transitions (3):
This Guide will work through the menu top to bottom, tab by tab:

Inputs- Allows you to add or edit basic inputs required for optimization and analysis 
Outputs- Allows you to view yearly cashflow and projection for existing and recommended scenarios for client group
Summary- Allows you to view a summary and analysis of you existing and recommended scenarios along with details relating to TTR income amounts and contribution to super information for strategy implementation. 
Required information needed to be input into the Fact Find 
  1. Existing Super Details- Within the Super, Pension and Investments tab of the fact find please ensure you have input current superannuation balance and underlying investment holdings (2 in screenshot 2 below)
  2. Ensure that your clients risk profile is updated (2 and 3 in screenshot 1 below)
  3. Personal Details tab in Fact find- Please ensure you have input your current salary and SG amount (4 and 5 in screenshot below- SG is below salary)
  4. If there are any investments (managed funds or shares owned by your client) input these details into Super, Pension and Investments tab as well (3 in screenshot 2 below)
To input these details go to the main menu > Client > Fact Find 
Points two and three are completed in the personal details tab (1):
Screenshot 1

Points one and four are completed in the Super, pension and investments tab (1):
Screenshot 2

*For more information on how to find/complete your Fact Find for your client- see the Fact Find guide we have in our help centre.

Inputs

Strategy Details 

The first tab in the transitions module is Strategy Details.
After you have completed your fact find information, saved and accessed the transitions module > strategy details, your first step is to bring all information from the fact find through to the transitions module by selecting 'Update from fact find':

As a result of selecting this option, the following information will be updated from Fact Find:




Next be aware that if you client is part of a client group and you wish to model a transitions strategy for both of them, you will need to toggle between both clients up the top left hand corner and input information for both clients where relevant:

Where information is joint (owned by both clients) it will flow through to the other partner once input. 
Your next task is to set the start of projection date. It will default to the current month you are in. You are able to adjust this based on your preference. 

If you would like to arrange for your client to make additional concessional contributions to super above the Concessional Cap of $27,500 using the Catch Up rule you will need to leave the following field unticked:

If you want your to only make contributions up to the Concessional Cap of $27,500 please tick this box:

You can also build into your strategy information on any existing regular contributions (per annum), both PCC and NCC, that your client is making:

If you're client any tax deductions each year- you can also input these details as shown below:

If you would like to input more specific details for your contributions and tax deductions etc; with information like indexation rate and dollar amounts for certain years you can select the transactions button on the right;

The following page will appear:

  1. Indexation- allows you to set your own indexation or remove indexation. Please note the default indexation rate if 2.40%
  2. Allows you to arrange contributions each year if stepped by 1 or every second year if set to 2 and so on.
  3. Each financial year can be subsequently edited (or overridden) if need be despite setting a regular contribution of $85,000 in the value field.
Next you will need to ensure all details relating to your existing super account are correct and that all fields- balance, taxable components, risk profile, fees and caps are up to date. If your client also currently has an existing pension account, you will need to ensure that you select the 'Include pension in existing scenario' tick box. 

Next you will need to set the rollover date for when you would like your client/s to commence their TTR product:

If you are looking to rollover your full accumulation account to TTR please tick 'Roll all super to TTRP':

If you want to arrange a partial rollover, please do not select Roll all super to TTRP, but instead input the amount you want rolled to TTR in the TTRP purchase price field. 
The option 'Use optimal TTRP Income' gives you the option to maximize contributions, whilst reducing tax, along with allowing your client to receive an income that covers their expenses. This is a powerful tool that calculates everything for you (relates to the Optimise button which is discussed below):

Alternatively, you can keep this option unticked and you can set your clients TTRP annual income yourself below. 
You can also input fees and risk profile for your TTR and Super in the below fields:

If you would like to arrange a pension refresh over certain periods you can:

Selecting 'None' will mean no pension refresh. By pension refresh- we mean you have the option of adding more money to TTR from Super over select periods (see options in dropdown).
By choosing to 'Ignore TTR pro-rata in the first year' you can ensure that your client receives the full annual amount based on the pension amount you set:

If unticked- your client will receive a pro-rated amount based on the remaining months of the financial year. 
At the bottom of the Strategy details, you have the option of modelling Investments:

You can also input transactions by selecting the transactions tab which opens the following:

The other settings section above the investment details displays the super and TTR tax rates:

The rates that flow through to this section are based on the risk profile that you have set for your client. Therefore changing the TTR or Super risk profile will update the TTR tax rate. You can overide the amount in this field if you would like to specify a 15% tax rate (which is the legislated amount). You will not be able to set a rate above 15%. You are able to have a rate of 0% if you would like. 
The increased accuracy (slower option)- this refines the optimization of drawdowns in the module to use fractions of a percent. By selecting this tickbox the optimization will run 70 times per annum instead of 7. When first coming to this page the default is unticked but it can be ticked to see if there are extra benefits in optimizing to 0.1% rather than 1% drawdown. The best option is to test to see what suits your client the best. Tick the box and then have a look at the output sections below to see what strategy and numbers best suit your clients situation and objectives. 

The optimize button allows you to run your strategy. 
There are 3 basic choices available - Match Current Net Income, Set Net Income and Select Level of Concessional Contributions. 

Match Current Net Income- AdviceOS will determine the optimal concessional contributions to maintain the clients current level of net income while implementing a TTR strategy. In other words, the system will calculate the optimal drawdown income from TTR whilst also maximizing concessional contributions to super. If you are looking to use this option you need to ensure that you have the following boxed ticked:

Set Net Income- AdviceOS will determine the optimal amount of concessional contributions to maintain the desired level of net income whilst implementing a TTR strategy. 
Select Level of Concessional Contributions- Users can manually enter level of concessional contributions desired 
After determining which of the above three options you believe will best suit your clients strategy, you can also edit 'Other Settings' to include additional settings in relation to your scenario:

1) Minimum salary requirement ($ p.a.)- this allows you to enter a minimum salary whereby any concessional contributions will ensure the minimum gross salary is maintained. For example if you would like to ensure any recommended contributions do not reduce the clients gross salary below $100,000, you would enter 100000 into this field. 
2) Calculate optimal non-concessional- allows you to optimize Government Co-Contributions by ticking the box. 
3) Excess net as non-concessional- allows you to set any excess net amount as non-concessional contribution after optimizing concessional contributions by ticking the box. 
4) Contribution Cap buffer- you can set a contribution cap buffer for concessional contributions. For example you may want to retain a buffer of $1000 for future possible contributions. 
Example of a Strategy:
Your client comes to you and you decide after hearing their objectives and needs that you would like to recommend a Concessional Contribution strategy of $20,000 (2) per year to super and to respond to your clients request of having a desire net income from TTR of $55,651 (3). 
Given that you have a specific request for $20,000 per year for concessional contributions as well as a desire net income amount, the only calculator you can use for this strategy is the 'Select level of Concessional Contributions' (1). 
Your inputs would therefore be: 

Create Report 

After completing the analysis you are able to generate a transitions report by clicking 'Create Report' on the strategy details tab. Alternatively you can generate a Statement of Advice in the Quick SOA tab (see below) or use plan builder to generate an SOA (see Plan Builder guide in the Help Centre for how to arrange this). 

Outputs 

Existing Cashflow

Once you have set up your strategy and details, you can view the results under the Outputs section. 
The existing cashflow table illustrates the existing cashflow for the client, based on their current salary, investment income, super guarantee, concessional and non-concessional contributions that they are currently making as well as the tax implications without a TTR strategy. 
The outputs are based on the following details set within Strategy Details:

Based on my inputs, my existing cashflow looks like this:

Existing Super Projections 

This table summarizes the projection for existing super balance for each client (in client group) based on their current start start balance, super guarantee, current concessional and non-concessional contributions, fees and tax implications without the TTR strategy. 
It will look something like this;

The middle section shows the transfer and contribution cap information:

It acts as a basis as to why the system will allow you to make Contributions up to the cap but not above it. 
This table illustrates the recommended cashflow after optimization has been completed for each client. From the recommended cashflow table you can view the recommended concessional and non-concessional contributions you have set in strategy details, as well as the effect on estimated total tax liability and desired income. 
The outputs are based on the following inputs in Strategy Details tab: 



The table will look something like this:

As you can see my TTR commences in the year 2040 as I had directed it to in Strategy details. 
The recommended cashflow table calculates based on optimization that my client will be able to afford receiving 10% (max pension payments) in the first year and then drops to 8% and 7% in the subsequent years whilst my client continues to make Concessional Contributions of $20,000. Meanwhile their salary increases with indexation. The tax implications are also highlighted along with the Non-Concessional contributions that my client will make whilst possessing a TTR platform. 
This table illustrates the recommended super projections after optimization for each client. You will be able to see your recommended Concessional and Non-Concessional Contributions and their projected effect on the year-end super balance based on your TTR strategy. 
The page will look something like this:


The highlighted portion is based on the years that client commences and holds a TTR product. 
The top portion looks at your super account which i have running whilst my client is invested in a TTR. It discusses the PCC and NCC contributions being made and its subsequent effect on the my clients super balance. I have set Pension Refresh to "None" in the strategy details tab which is why this row shows a $0 figure. 
The middle section shows the transfer and contribution cap information and again, it acts as a basis as to why the system will allow you to make Contributions up to the cap but not above it. 
The bottom portion looks at our TTR, the income being paid and the earnings being made. I have not set fees for my TTR and again there is no pension refresh occurring so no additional money being added to my TTR from super each year. 

Summary

Outcome Analysis

Under the outcome analysis tab, users can view the comparison between existing and recommended scenarios on average after tax income, average concessional, average TTRP income, average income tax paid and final superannuation balance in a table. The graph at the bottom of the page compares projected super and pension balance for the existing and recommended scenarios. 

Tax Analysis 

The tax analysis tab allows you to view the impact of your TTR strategy on the estimates tax payable between existing and recommended scenarios. 

By comparing the bar chart and the line graph, along with the table below which shows projection data, you can determine whether implementing a TTR strategy will help improve the clients estimated tax and retirement position. The graph (purple line and red bar) and my table above show that my client will pay less tax as a result of my TTR strategy.  

Implementation

This tab allows you to view the comparison projected net income between existing and recommended scenarios. Also there will be a schedule illustrating the strategy implementation on concessional and non-concessional contributions along with TTR income based on your TTR strategy. 

As you can see you will be able to see the concessional and non-concessional contributions along with the TTR income side by side. You are able to select frequency of contribution payments from weekly, fortnightly, monthly, quarterly and annually.  

Advice 

Quick SOA

To create a quick SOA. Simply click on Create quick SOA in the top right hand corner

Give your SOA a name and choose the relevant template. 
After selecting save you will then need to complete the 3 tabs to flesh out the information for your SOA- Objectives, Recommendations and Advice Fees by selecting 'Add' on each:

When adding a recommendation the subtopic to focus on is 'Transition to Retirement' and the options that include '(Transition)' at the end. 
You will notice that a list of possible recommendations will come up for you to choose from- relevant to your client. Next to each recommendation is text written in brackets. This relates to the section of AdviceOS that you would like the system to pull information from. If you have used only Transitions Module for your modelling you will only select the text next to "Transition)'- for example:


To generate the SOA after you have built in your objectives, recommendations and advice fees you will need to select Generate SOA on the top right: 
The number 1 will appear above your name in the top right like so:

Click on this to access your SOA in the list of recent reports (ensure you press refresh for the SOA to appear)
Please note that all tables and graphs that are appear in the Retirement module will appear in the Appendix section.

For any further questions on this module please contact support:
By Phone: 1300 882 938

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