Compare retirement scenarios and stress test your plan with Canwi

Most free retirement calculators ask you a handful of questions and hand back a single number. Canwi works differently. It models your entire financial position, including income, expenses, assets, debts and super, then lets you build alternative scenarios and compare them side by side.

In this video walkthrough, we demo the paid version, Canwi Plus, using a fictional couple aged 54 and 55 with $850,000 of equity in their home and a $350,000 mortgage still to pay.

We look at the features most free calculators can’t match: carry-forward concessional contributions, bring-forward arrangements, and the ability to change your assumed investment return partway through a plan. We then builds a second scenario in which the couple direct their surplus cash into super rather than into their mortgage offset account, and compares the two on projected net worth, debt-free age, lifetime tax and retirement cash flow.

The walkthrough finishes with the tool’s Monte Carlo stress test, which runs 1,000 versions of your plan using varying inflation, investment returns and interest rates. This plan returns a 61% chance of success, and we explains why that figure looks worse than it is once you look at where the projected shortfall actually falls.

Let’s take a tour through Canwi so I can show you some of what it can do. When you first join up, you’ll be prompted to enter all of your personal details, like your expenses, your income and your assets. I’ve gone through that process already, but I can show you where all that information appears and where you can edit it.

If you come over here to the left hand menu, this is where you can navigate through the tool. So I’m going to click on income, and that shows that I’ve entered income for the wife and the husband. In this scenario they are 54 and 55, and the husband’s currently working part-time, so his income is lower. You can also enter any other income that you have here.

So for example, if you had an investment property from which you were receiving rent, you could enter income from your assets here, and any other miscellaneous items that you have coming in. Then you also need to enter your expenses. And the more detail you can go into here and the more accurate you are, the better your projections are going to be.

You do tend to underestimate your expenses if you just guess off the top of your head. So it’s really important to go through your own credit card statements or your bank statement to show what you’re actually spending, and put that information in. So it splits it down into your fixed costs, your lifestyle expenses and your weekly spending.

There are subcategories in there so you can enter what you’re spending on groceries, entertainment and so on. And all of these are adjustable. So if you find you’ve actually put in an incorrect estimate here, you can always edit it and change what your expenses are. It shows you over here on your budget breakdown what your income is and what your expenses are by category.

So you can see down here is the mortgage repayments, and then groceries and so on. And you can see if your income is more than your expenses or the other way around. So if your income is more than your expenses, that would mean you’ve got extra cash flow that you could use for saving and investing.

You can also choose here an item which is called your money flows. So you can choose your excess cash flow priority, which is if you’ve got extra money left over after all of your expenses, what do you want to do with that money? At the moment this is set so that the extra money will go into the offset account, which is attached to this couple’s mortgage.

You can also set shortfall funding priorities. So if you don’t have enough money coming in, where should your extra money come from for the expenses that you’ve set? Should that come from your savings account? Should it come from a superannuation withdrawal? If you have access to super, you can set those priorities.

So it’s quite sophisticated in what it can do. You also need to put in your assets. On the balance sheet here, you can see I’ve put in a main residence with equity of $850,000. So this couple have paid off quite a lot of their mortgage, but they don’t have any investment properties. And then in other assets is where you would enter everything else.

So I’ve got a cash account here, which is the offset account attached to the mortgage. And then in other assets, just superannuation. So I’ve kept it really simple. Of course in your personal situation you’d put in all of your other assets, but I didn’t want to make this too complicated just for this demonstration.

In the superannuation section, obviously that’s what we at SuperGuide tend to be most interested in. The superannuation section is really great. It lets you put in not only how much you have, but how it’s invested, and also your past contributions so that you can see if you’ve got carry-forward space available to make additional concessional contributions over the normal annual cap.

A lot of calculation tools don’t have the ability to build that in, so it’s really great to see. Again, I’ve filled this in already, but I’ll show you how to do it. If you want to edit it, you just click the little three dots. You can do that on all the items within Canwi, and then you just press edit.

So you can see here I’ve got it called superannuation. I’ve just left it as a balanced portfolio at 6.5%. You can choose your own return if you want to. Those are just suggested averages of 15 year returns, and that actually comes from SuperGuide. You can say who owns that superannuation account and its current value.

You can see here you can change that growth rate if you think your balanced option is going to perform differently from that 15 year average. For example, you could delete this and put in a different number. I’m not going to do that, I want to keep it the same. So let’s just edit that back to what it was.

Now here’s the concessional contributions section. You can turn this on if you want the ability to take into account your unused contributions from past years to increase your concessional cap. You can’t do it just on this first page here. You can see what I’ve already done, but you actually can’t edit it.

To change it, you need to go into this advanced tab here. So if you just click on advanced, it will expand out and you can put in your actual contribution amounts from the past five years. So it’ll work out your unused space for you and let you incorporate that into your plan. So I’ve done that already, and we can just exit advanced here.

You can also put in if you’ve already started a bring-forward arrangement, which again is really fantastic to see. So if you wanted to, you could turn this on and say you are already in a bring-forward arrangement. You’d put in what year that bring-forward arrangement started and what you’ve already put in, so that it can take that into account as well.

I’m not going to do that, because I’m going to assume this couple have not started a bring-forward arrangement. What that is for, if you don’t know, is if you contribute more than the annual non-concessional cap in one year. So that’s your after-tax contributions. If you put in more than the cap, you’ll trigger a bring-forward arrangement, which will allow you to bring forward some cap space from one or two future years to increase the amount that you can contribute.

So you can read more about bring-forward on SuperGuide as well if you need to learn more about that. But it’s great to see that this tool has this available. Once you’re happy with all of that, just press save and it’s all in there. So again, if you’ve made a mistake with this, you can come back here at any time and change your numbers so that your projections will be accurate.

Okay, so I’ll just close that down. Once you’ve entered everything… oh, sorry, I forgot about debts. You put in your debts as well. Of course, I’ve put in the mortgage here with a $350,000 balance remaining. Once you’ve done all of that grind work of putting all your information in, that’s where the tool really comes into its own.

Then you can start to make a plan, set goals and explore. So what I’ve got here is the default scenario, I’ve called it. So we are looking at the default scenario right now, which is: what if this couple do nothing different from what they’re currently doing, which is just working, having their employer make some contributions to super, and all their excess money that they’re not spending is just accumulating in their offset account to repay their mortgage.

So that’s their current scenario. Do nothing. Where we can look at that is in this future plan section. So you can see the future plan section has got a summary, a plan builder and plan tables. Now where you are going to build your plan, unsurprisingly, is in the plan builder. So that’s the first thing I’m going to show you.

This plan builder is split down by one year at a time, so you can see what you’re doing in each year. Now this one’s not very exciting because I haven’t added very many events into here, because it’s just the do nothing scenario. But I’ll scroll across for you so you can see what the tool is highlighting.

It’s saying here that you’re eligible to make downsizer contributions, and that’s because the couple are turning 55. So it’s flagging for you that that’s something that’s going to be available to you because you’ve turned 55. If you scroll across, you can see other things that it’s highlighting here.

You’ve hit your preservation age, which is when you can start to access your superannuation. And you might start a transition to retirement pension if you’re still working. If we continue to go across here, you can see here’s where we have unrestricted access to super. It just disappeared. There you go.

So it’s flagging through too, because it wants to draw my attention to both what the net worth will be in 10 years, and also that we’ll have unrestricted super access at age 65, even if we’re still working. So it’s cycling through those two. And then you’ll find the things that I’ve actually put in.

So here I’ve entered manually that this is where the couple want to retire, and also that their expenses will change at this point. So I’ve increased their expenses. They’re wanting to spend more on holidays and leisure, and probably home utilities as well once they’ve retired, because they’re going to be at home more, so they’re going to be using more electricity and so on in the home than they were when they were out of the house all day working.

So if I go into this change expenses item, you can see here what we’ve done and the percentage change. So I’ve said they’re going to spend the same on groceries, but they’re going to spend a lot more on entertainment and eating out, 67% more. Their fixed bills will stay the same, but the utilities costs are going to go up and their lifestyle costs are going to go up.

So for weekend trips, events, that sort of thing. So that’s really easy to build in, and save there. I’ll save that for now and show you how to actually add it. So it’s already there because I’ve done it. But if you wanted to add that event, or a different type of event, you just click up here where it says add new event.

And then there’s a whole range for you to choose from. What are you doing? Getting married, starting childcare, having a holiday, getting a gift. There’s work and income. So if you’re going to take some time off, or you’re going to retire. That’s the one I’ve used for these, the husband and wife’s retirement.

If you’re going to change your work hours, things that you might do with your property. So are you going to be moving, selling your home? All of those you can put in. These are your investing and wealth ones. So you’re going to start a regular investing plan, like start to put money into an exchange traded fund.

Are you going to make some super contributions or a lump sum withdrawal? Are you going to change your superannuation? So this one is actually really good to have here, because you might at the moment be invested in a high growth portfolio, and that’s what you’ve entered as your expected return for your super.

But if you expect that as you get closer to retirement you’re going to change that and have a less risky portfolio with a lower expected return, you can use this change superannuation button to put that in, so that the tool projects forward a different expected return from when you’re going to change that. Which is really fantastic to see.

Again, most publicly available free tools are not going to be able to do that sort of thing for you. You can put debt things in here if you’re going to refinance or get a personal loan. And if you’re going to transfer some cash. This is the change expenses one that I’ve used, so you would click that one and bring it across.

So let’s choose a new one and I’ll show you how they work. Let’s say the couple were going to contribute to super, or let’s choose a downsizer contribution. So let’s say they were going to make a downsizer contribution. We would click on it, and I’m just holding my mouse button down. Now I can drop this event where I want it to be, in whatever year.

So let’s say they were going to do that at 65, two years before retirement. You would enter what you are going to sell as far as your home, and what contributions you are going to make. Now, it’s actually not going to let me just add a downsizer contribution by itself, because it knows I haven’t sold my home.

So what it’s asking me to do here is add a sell home or move home event in this same current year to make a downsizer contribution. So that’s what I would need to do to make this possible. So you can see the tool is always going to explain to you what is going on when you try and add an event like this, if the circumstances are not quite right.

So I’m not going to add that, because I don’t want them to sell their home and make a downsizer contribution. But this just shows you how you would add that to the timeline if you wanted to. Continuing across, we can see I’ve also got take a holiday over here. So they want to take a big trip a couple of years after retiring.

And I think that’s the final event. Oh no, another change to expenses. So once they turn 80. And these numbers up here, next to the year, show you your age at the time. So the age of the primary user, in this case I’ve set the wife as the primary user, and it will show their age on there.

So at age 80 I’ve lowered the expenses, because that’s when people tend to start wanting to wind down a little bit, have fewer holidays and outings and so on. So they don’t have as much in the way of costs. So that’s the basic default scenario. At the bottom here, you can see these blue and orange bars tracking along, and that’s showing you if you are spending more than you have coming in, or the other way round.

So the blue is your income and the orange is your expenses. So you can see in these years the expenses in orange are higher than the income. So we’ve got money being drawn from savings, and it’s highlighting that for us. You’re drawing down your money for your expenses, and you can track that all the way along in the scenario.

Instead of tracking cash flow, you can also track your wealth. It shows you the bars of your wealth. You can also click this cash flow and savings button to see both cash flow and savings at the same time. So it’s quite flexible as to how you want to look at your plan.

Once you’ve entered everything about your current position and what you expect to do if you don’t change any of your plans, you can come back to this home page just by clicking home at the top here on the left, and you’ll see your overall snapshot of your position. So it shows you your current net wealth and your projected wealth into the future.

It also has your goals in here, and you can edit this. I’ve just selected build a clear plan as the goal, but you can choose the goals that apply to you. It also shows you your liquid assets here. So this big jump at age 60 is when the superannuation becomes available. That’s the preservation age.

So that’s why you see that big jump there. It shows you when you’ll be debt free, and it also shows you your retirement cash flow. And you can see here in the scenario that I’ve built, it’s got an alert, because it’s saying that the retirement expenses might be more than the income, about a thousand dollars a month more on average, which means that the retirement plan might need some adjusting.

So that shows you where you are up to and where you might need to pay some more attention. Once you’ve got this scenario in place, you can really start to build on it. And one of the really great ways to do that is to build another scenario. So compare what would happen if you did something different from what you’re currently doing, and how would that change your outcome?

So how to do that is just to come over to the scenario portion of this tool. Over here you can click scenarios to create new scenarios and explore them and compare them. So you can see in here I’ve already got two scenarios at the moment, the default scenario and Boost Super. Now, a really good way to make a new scenario is, instead of clicking this new scenario button, you can duplicate a scenario you already have.

So that’s what I actually did. I clicked this duplicate button to make a copy of the default scenario. That means everything that you’ve already built and entered is going to copy across: the planned retirement age, the change in expenses at retirement and at age 80, and the big holiday that you want to take is already going to be built in to the new scenario that you create by clicking this duplicate button.

So I’ll do that again just to show you how it works. It’s really fast, it just builds your copy. So currently it’s called default scenario copy. I actually don’t want that one, so I can delete it if I want. To delete it, you press this button and hold, so that way it makes sure you’re really sure you definitely want to delete that scenario.

So I’ve done that already and built this new scenario called Boost Super. So let’s have a look at that scenario instead. You can change them up the top here, as to which scenario you want to look at.

So now we are looking at our Boost Super scenario instead. If we go to the plan builder here, you can see the different items that I’ve added on the timeline. So just by clicking this add new event button, I’ve added in a lot of different things that the couple could do instead of just dumping their excess cash flow into the offset.

The first thing I put in is a lump sum deductible contribution. So the idea here is that the wife will take all of the $45,000 they have sitting in their offset account, put that into super and claim a tax deduction for that this financial year. She could do that because she’s got the available carry-forward space to make that happen.

And the tool is building that in for her. So I’ve said yes, please use the carry-forward space, and it will do that to make sure that the contribution goes in under the cap. I’ve also built in then some ongoing salary sacrifice to super from both parties in the couple, from the next year onwards.

And you can see how this cash flow item at the bottom here really comes into its own when you are doing that, because I’ve done a bit of a balancing act here with how much salary sacrifice I’ve entered, to make sure that they still have pretty much enough cash flow after their super contributions to meet their living expenses.

So if it was taking it below the affordable level and you didn’t have enough income to live on, you could just go in here and edit these to contribute a different amount to your superannuation. So I have those built in, some more ongoing regular salary sacrifice here. This is just a change in the amount of the salary sacrifice, because that’s when the wife is projected to run out of available carry-forward space.

So she’ll have to reduce her contributions to stay under her cap. Here I also have the husband starting to make some non-concessional contributions to super, because it’s not going to be necessarily tax effective for him to make more concessional contributions. And the wife has run out of space under her cap to make any more concessional contributions.

So their excess cash flow instead is just going to go into super after tax. And that’s all built in there too. You can see what I’ve done here as well is put in an additional repayment. So by default, the projection is going to model that you’re just going to keep paying your mortgage repayments until it’s paid off.

In the projection here, what I wanted to do is say, well, once they turn 65 and they’ve got access to their super balances, instead of just continuing to repay their mortgage, they will take a lump sum out of super and pay off everything that remains in the mortgage. If we go into this, you can see the detail here.

It does this for you. I don’t need to know what the expected mortgage balance is going to be at that point in time, it’s projected that for me. So I just clicked that this was the mortgage I wanted to pay off and that I wanted to pay it off in full, and it’s going to put that in there for me. So that’s really quite a handy thing.

We’ve still got retirement and all the normal changes to expenses and holidays that we had before, because I copied that across from the other scenario. I’ll just quickly show you as well, here in the future plan section, if you’d rather look at this in the form of a table. If that kind of makes more sense to you in your brain, you can do that.

And it’s got this really detailed plan year by year of what’s going on, in a table format instead of in a graph. So that’s also a really nice thing. You can export that if you want and play with it in Excel or your other spreadsheet manager that you have. It’s looking at cash flow by default, but you can click balance sheet instead, and be your own accountant if you would like to.

Now that we have our two scenarios, we can compare them. So if I go back to the home page, it’s going to show me the difference in projected wealth, and the difference in when the mortgage will be paid off. So you can see now it says we’re going to pay it off at 65, because we’re making that lump sum super withdrawal to make that possible. Before it said 67.

The retirement cash flow projection has also really improved. We’ve made some significant contributions to super, and the tax advantage of those contributions has meant we’ve got more in retirement savings at the point of retirement. So we have more money to generate retirement income with, and it looks like it’s going to exceed the goal.

Now that you’ve got the two scenarios though, you can compare them, and you can compare more than two. But I’ll just compare the two. So you can click scenario comparison here. There’s also another section to do that if you go into the scenario section itself, but this is a fine place to find it. So you can click up to three scenarios to compare them.

I’ll click just the two that we have and say that I’d like to see the comparison results. So it shows me the default over here and the Boost Super scenario here, and it highlights which one is better off. So the net worth is higher with Boost Super, both in 10 years and at the end of the plan and at retirement.

The debt free age is better. Total lifetime income is more. Total lifetime spending is more. This is an interesting one. At first I was confused by this, because I’ve set their budget for spending the same in both scenarios, but the reason it’s doing this is that it counts your superannuation contributions as spending.

So it’s not really spending, it’s saving, but there’s nowhere else to put it really. So it’s falling into that bucket of spending, and that’s where that’s coming from. It also shows you you’ve paid less tax in the new scenario that you’ve built, and you’ve paid less for your debt repayments. So better off overall, unsurprisingly, by taking some action and doing something a little bit more sophisticated than just putting money into a savings account.

So that’s really fantastic to see the comparison. You can keep building more and more. If you thought, well, what would happen if the husband went back to work full time for a bit and we retired sooner, copy your scenario and do that. Go for your life, do whatever you would like to do and compare.

The other thing that this tool has, which is a really excellent function, is exploring your chance of success. So if I click on this, I can show you the chance of success. I’ve already run this, so it’s come out as 65%, but I’ll show you how to do it. It’s very easy. You just click new run and it will simulate a thousand possible scenarios of your plan.

So different levels of inflation from year to year, different investment returns on your super, different interest rates on your mortgage, and really stress test your plan to show you your chance of success.

If you’d like to, you can click on this advanced tab and change the assumptions that the modelling is going to use. So you can change the inflation rate, wage growth, interest rates, and how volatile your own investment returns are. This asset growth number for volatility is quite high, so it is saying that most of the time your investment return would be expected to be somewhere between the average minus this number and the average plus this number.

So if you’re using a 10, and your expected average return is 6.5%, which is what we’ve set for a balanced portfolio in super, that would mean that most of the time the return would fall somewhere between 6.5% minus 10, which would be negative 3.5%, and 6.5% plus 10, which would be 16.5%. So this symbol here that they’re using for volatility is for standard deviation.

So it means that roughly 70% of the time the return would be expected to fall in that range. If you double it to two standard deviations, so plus or minus 20%, then that would capture around about 95% of the expected returns over the period of time. So you can change that number if you think your own personal portfolio is less volatile than that, or more volatile than that.

And you can change the volatility for all of the numbers as well, how volatile interest rates are and wage growth and so on. I’m just going to leave it at the standard numbers, exit that advanced tab and then click run simulation. So it will run it for me, and it will come out probably at 65%, which is what it arrived at before. But we can see that processing and wait for the number.

Okay, so you can see this time it’s come out as a 61% chance of success, which it’s saying is reasonable. Now, you might be looking at that and thinking, oh well, that’s quite a low number. Why is it only a 61% chance of success? I thought the numbers we were looking at were looking pretty good. That’s why a stress test is important. But it’s also important to look at why it’s coming to this result.

Because this simulation, it’s called a Monte Carlo simulation, is looking at what’s the chance that in some of these scenarios you are going to run out of cash flow. So you’re going to be in a position where you don’t have available savings to draw on for the expenses that you’ve put in. And that could be a really bad thing, or it might be okay, depending on the exact scenario that you’re looking at.

So if we come down a little bit further in this tool, you can actually see how it’s spread this out. The dark blue part is the middle 50% of expected results, and then the light blue parts are the other sides of that. And this that we are looking at initially is the net worth number, which looks pretty good all the way along, even in the worst case scenario.

The net worth at age 100 is nearly $3 million. So you start to think, well hang on, that doesn’t look like a 60% chance of success, it looks like a 100% chance of success. But what we need to check is the cash balance. And then you can see where this result is coming from, in these bottom scenarios.

And even in our planned scenario, which is the dotted black line, the cash balance does go pretty much down to zero in those scenarios, and that’s what’s causing this outcome. So if you come down even further, you can see the cash balance by year. It’s showing you every five years by default, but you can click here to see all years, and then we can see the problem.

These red numbers are showing us that in the range when we are around 57 to 62, there’s a chance on the bottom side that we are going to run out of cash flow and not have the money available to do what we’ve said we’ll do in our plan. But our plan at that point in time largely consists of making contributions to super.

So if this scenario did happen, you could just contribute less to superannuation and that would fix it. You’d have your money to live on still. If you keep scrolling down, you can see as time goes on the cash balance is overwhelmingly positive.

So there’s no risk really of running out of cash in these later years, even in this bottom 10% scenario, which is the really unlucky end. So although we’ve got only a 61% chance of success modelled here, when we dig into that we can see why that’s happening, and that in this particular situation that wouldn’t be a disaster.

If you had lots of projections down here saying you were going to run out of money in your seventies, when you were not earning anymore and couldn’t just stop contributing to super to fill that gap, then that would be much more of a problem. And some of these numbers are a little bit low. So that’s why the stress test is pretty important for your plan.

So that’s quite a lot of how this Canwi tool works. There is lots more. We’ve barely scratched the surface of what is possible here. The more you put into it and the more you play with it, the more you’ll find and the more features you will explore. One last thing that I can show you is this track function, which is where you can keep a record of where you are at, perhaps monthly, or every six months, however often you want to take a snapshot of where you are actually at versus what your plan said you would be at, and you can track your progress.

So it’ll track your wealth over time. You can click here to update your current position, to tell it where you’re really at and save that point. So as you use the tool more and more, your actual result and your projected result will start to appear here, and you can really get a handle on how you are going and if your plan’s coming out the way that you wanted it to.

So I hope this gives you some great information about how Canwi works. Some of the things that are going to be added shortly: one of them is the option to have a transition to retirement pension. That’s not built in just yet, but it’s something that’s coming. Other features that Canwi are looking to add are things like AI integration, so you can tell the system in your own words what you’re trying to do and what you’d like to add to your plan, and it can build that for you instead of you having to find where you need to do that.

They’re also looking to have more of a rolling projection. So at the moment this model is always going to work from the day that I first started using Canwi, and it’s going to model my plan from there on, which is great. But they’re also going to bring out a function where you can update your plan as you go and always plan from today. So look at where am I today and where am I going, instead of looking at your whole plan from the beginning.

They’ll add more functionality as they go. Things like being able to just direct your excess cash flow to super in the form of a salary sacrifice. So instead of having to build that manually like you saw me do in this plan builder, you’d just be able to select that as a cash flow priority. And they’re also looking to add defined benefit super funds and self-managed funds. So there’s lots in the pipeline.

You can also make suggestions as well. So I’ll just show you here in the plan builder. If you click add new event and have a look at what’s available here, there is a lot. But if there’s something that you think of as an event that you’d like to add to your plan that’s not already there, you can click this little tab here to show events that aren’t built yet.

So these are things that are being worked on already, around what if I get divorced, what if I get an insurance payout, property damage, a health incident and so on. So those are things that are in the pipeline. And if there’s something that you want as an event that you still can’t see, you can get in touch with Canwi and let them know what it is you are looking for.

They’ll be able to help you figure out how you can do that already in the tool, or work on starting to build that. When you first join up, you can choose whether you want to have a free account, or you can choose Canwi Plus, which is the paid version. What I’ve been showing you today is Canwi Plus, so there are some functions in here that I’ve used that won’t be available to you if you’ve just got the free version. But you could certainly sign up to have a play around and see if you like it, and get a feel for it before you decide if you’d like to sign up for Plus and get that full functionality.

So I hope this was helpful, to have a look at this tool that can be used not only for planning retirement, but for planning anything financial throughout your entire life.