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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

  • The default start date must be the start of a financial year (i.e. July 1). 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
  • At the Cash flows & Goals step, you can choose between 10 and 20 years.
  • For less than 10 years or more than 20 years, we may be able to do this if you submit the case to your SDS
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 value (%pa)Notes on changing default
AWOTE
  • 2022/23 to 2024/25: 4.0
  • 2025/26 onwards: 3.5
  • 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.
CPI
  • 2022/23: 5.0
  • 2023/24: 3.0
  • 2024/25: 3.0
  • 2025/26 onwards: 2.5
Rental CPI3

Cash returns

Type

Default value (%pa)

Notes on changing the default
Cash account

2023/24 and 2024/25: 4.1
2025/26 onwards: 3.2

  • 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 (term deposits, government bonds))
  • 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 deposit3.7
Australian bonds3.7
International bonds3.4

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

5%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.

2 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 value (%pa)Notes 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 only6.5
No restriction6.5
Principal and Interest6
SMSF LRBA Interest only10
Unsecured Loans
Interest only9
No restriction9
Principal and Interest9
Reverse Mortgages
Flexible7
Instalment7
Lump sum7

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

  • Returns are before tax.
  • All ‘Shares/managed funds’ have 0.05% buy/sell spread. This means that shares are bought for slightly more expensive price (0.05% more than specified) and sold for slightly less expensive price (0.05% less than specified), this helps Pathfinder avoid roundabout transactions.
  • 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
Alternative3.92
0
Australian bonds0.23.7
0
Australian equities (direct)4.14.18850
Australian equities (trust)4.14.18850
Balanced2.313.84
060% growth assets
Capital protected 70% growth fund2.133.68

Capital guarantee Entry fee: 2%

Capital guarantee fee: 1.8%


Capital protected 85% growth fund3.043.86

Capital guarantee Entry fee: 2.1%

Capital guarantee fee: 2%


Cash (direct)0

2023/24 and 2024/25: 4.1

2025/26 onwards: 3.2


0
Cash (trust)0

2023/24 and 2024/25: 4.1

2025/26 onwards: 3.2


0
Conservative1.513.75
040% growth assets
Defensive0.813.60
020% growth assets
Emerging market equities7.12.4
0
Growth3.123.97
080% growth assets
Hedge fund aggressive4.91
0
Hedge fund conservative4.91
0
High growth3.984.06
0100% growth assets
Infrastructure34
0
International bonds0.23.2
0
International equities3.42.6
0
Listed Australian property2.64.9
0
Listed International property2.44
0
Precious metals2.50
0
Secure03.2
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 fund5.25.9

Australian bonds2.472.9

Australian equities (direct) fund7.99.1

Australian equities (trust) fund7.99.1

Balanced fund4.855.58
60% growth assets
Capital protected 70% growth fund5.045.8
  • Capital guarantee entry fee 2%pa
  • Capital guarantee fee 1.8%pa

Capital protected 85% growth fund6.026.9
  • Capital guarantee entry fee 2.1%pa
  • Capital guarantee fee 1.8%pa

Cash (direct) fund2.042.4

Cash (trust) fund2.042.4

Conservative fund3.964.59
40% growth assets
Defensive fund3.163.68
20% growth assets
Emerging market equities fund9.1510.3

Growth fund5.756.6
80% growth assets
Hedge fund aggressive fund5.35.9

Hedge fund conservative fund5.35.9

High growth fund6.687.64
100% growth assets
Infrastructure fund6.17

International bonds2.32.7

International equities fund4.915.6

Listed Australian property fund6.147.1

Listed International property fund5.386.2

Precious metals2.252.5

Secure fund2.042.4
0% Growth assets

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

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