Optimo Financial Default Assumptions

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This page lists Optimo Financial's default assumptions.  For more information about how assumptions work in Pathfinder, see How to see and edit the assumptions.

General analysis assumptions


Default value

Notes on changing default

Start date for analysis

If case is created between July 1 and March 31: the start date is 1 July of the current financial year.

If case is created between April 1 and June 30: the start date is 1 July of the next financial year

  • If you have organisation assumptions, you can change when the start date flips to the next financial year
  • If you submit the case to the SDS, you can request any start date for a case.
Length of analysis20 years
  • If you submit the case to the SDS, it is possible to extend the period of analysis.
Legislation

The Optimo Pathfinder model only includes legislation that has been passed in both houses of parliament and received Royal Assent from the Governor General.

Optimo Financial is constantly monitoring proposed changes so that if they become law, Pathfinder is updated quickly. We may also suggest ways to model proposed changes within the existing Pathfinder model. For more information on proposed changes see Legislative updates and Optimo Pathfinder.

Series for indexation


Default valueNotes on changing default
AWOTE

3%pa

  • For any case, you can choose a custom value instead of a the default index. e.g. By default, any income with the 'Wages/Salary' type is indexed by AWOTE, but you can put another value for the 'Index by' field.
  • If you have organisation assumptions, you can set your own default value for AWOTE, CPI and Rental CPI.
CPI2.5%pa
Rental CPI3%pa

Cash returns

Type

Default value

Notes on changing the default
Cash account1.5%pa
  • These values are pre-filled in the Interest rate when you choose the 'Type' for the cash account or fixed interest account (for more information see Cash or Fixed interest)
  • For any case, you can change the pre-filled value for the Interest rate field
  • If you have organisation assumptions, you can set your own default value.
Term deposit1.5%pa
Australian bonds4.4%pa
International bonds4%pa

Family home and Investment Property and assumptions

Family home and Property growth Series

  • These series are listed in the 'Index by' field in the series builder, when chosen, they will use the given values.
  • If you would like to override these values:
    • For any case, instead of choosing one of the below series, you can use the Custom % option
    • If you have organisation assumptions, you can request to change the default values for these series.
Series nameDefault values
House price growth2.5%
Unit price growth2.5%
Commercial price growth2.5%

Family home and Property income and expenses

If you would like to override these defaults:

  • For any case, all the below fields are editable (if they apply)
  • If you have organisation assumptions, you can request to change the default values.
  • Also see LVR assumptions
Property type

Growth %

(see above table)

Rental income

(% of property value)


Running Expenses

(% of property value)


Acquisition costs

(% of property value in year property is purchased)

Disposal costs

(% of property value in year property is sold)

Depreciation2

(% of property value)

Applies toFamily home and investment propertiesInvestment properties onlyInvestment properties onlyFamily home and investment propertiesFamily home and investment propertiesInvestment properties only
HouseHouse Price Growth Series

4%pa

1.3%5%2.5%1.2%
UnitUnit price growth Series

5%pa

1.3%

5%2.5%1.2%
Commercial propertyCommercial price growth5%pa1.3%5%2.5%1.2%
Existing NRAS unit1Unit price growth5%pa1.3%5%2.5%1.2%

1For existing NRAS units, the rebate will be applied according to the latest rebate value and will only be applied for the remaining years the property is eligible and the 20% NRAS discount is similarly applied to the rental income.

Optimo defaults, standard depreciation of 2.5%pa applies to building component so lower value of 1.2%pa reflects application to total property value.

Loan interest rates


Default valueNotes on changing the default
SECURED LOANS
  • These values are pre-filled when you choose the 'Type' for the loan (for more information see Secured loan)
  • For any case, you can change the pre-filled value for the Interest rate field
  • If you have organisation assumptions, you can set your own default value
Interest only5%pa
Principal and Interest5%pa
SMSF LRBA Interest only5%pa
UNSECURED LOANS
Interest only8%pa
Principal and Interest8%pa

Shares/Managed fund returns (directly owned or in an SMSF)

  • Returns are before tax.
  • Also see LVR assumptions
  • Notes on changing default:
    • If you have organisation assumptions, you can set different default values, and also add new Profiles.
    • You cannot edit this values within a case.
ProfileCapital growth %paDistribution/Income %pa% franked3Fees%4% growth assets
Alternative0.3%pa5.4%pa
0
Australian bonds0%pa2.5%pa
0
Australian equities (direct)3%pa4.5%pa70%0
Australian equities (trust)3%pa4.5%pa70%0
Balanced2.13%pa3.68%pa
070% growth assets
Capital protected 70% growth fund2.13%pa3.68%pa

Capital guarantee Entry fee: 2%

Capital guarantee fee: 1.8%


Capital protected 85% growth fund3.04%pa3.86%pa

Capital guarantee Entry fee: 2.1%

Capital guarantee fee: 2%


Cash (direct)0%pa1.5%pa
0
Cash (trust)0%pa1.5%pa
0
Conservative1.38%pa3.19%pa
040% growth assets
Defensive0.73%pa2.4%pa
020% growth assets
Emerging market equities7%pa2%pa
0
Growth3.04%pa3.86%pa
080% growth assets
Hedge fund aggressive10.5%pa0%pa
0
Hedge fund conservative7.5%pa0%pa
0
High growth3.8%pa4.14%pa
098% growth assets
Infrastructure3.2%pa5%pa
0
International bonds0%pa2%pa
0
International equities4.9%pa2.5%pa
0
Listed Australian property2%pa6%pa
0
Listed International property3%pa5%pa
0
Secure0%pa1.5%pa
00% growth assets


3If Franking credits are blank, it is assumed franking credits are included in the returns.

4Where fees are zero, it is assumed the returns are after fees.

LVR assumptions

These values are pre-filled, but you can override them for any case.

OwnerSharesPropertyFamily home
Individual508080
SMSFn/a50n/a
Trust508080

Superannuation investment option returns

  • Returns are after tax.
  • Notes on changing default:
    • If you have organisation assumptions, you can set different default values and add new Profiles.
    • You cannot edit these values within a case

Accumulation phase total return %paPension phase total return %paFees5% growth assets
Alternative fund4.9%pa5.7%pa

Australian bonds fund2.1%pa2.5%pa

Australian equities (direct) fund7.67%pa8.85%pa

Australian equities (trust) fund7.67%pa8.85%pa

Balanced fund5.04%pa5.8%pa
70% growth assets
Capital protected 70% growth fund6.3%pa7.2%pa
  • Capital guarantee entry fee 2%pa
  • Capital guarantee fee 1.8%pa

Capital protected 85% growth fund7.2%pa8.2%pa
  • Capital guarantee entry fee 2.1%pa
  • Capital guarantee fee 1.8%pa

Cash (direct) fund1.3%pa1.5%pa

Cash (trust) fund1.3%pa1.5%pa

Conservative fund3.96%pa4.57%pa
40% growth assets
Defensive fund2.7%pa3.14%pa
20% growth assets
Emerging market equities fund8.7%pa9%pa

Growth fund6.02%pa6.9%pa
80% growth assets
Hedge fund aggressive fund8.9%pa10.5%pa

Hedge fund conservative fund6.4%pa7.5%pa

High growth fund6.94%pa7.94%pa
98% growth assets
Infrastructure fund7.5%pa8.2%pa

International bonds fund1.7%pa2%pa

International equities fund7.025%pa7.4%pa

Listed Australian property fund7.1%pa8%pa

Listed International property fund7.25%pa8%pa

Secure fund1.28%pa1.5%pa
0% Growth assets

5Where fees are blank, it is assumed returns are after fees.