A teacher in their mid-career is starting to think seriously about retirement and wants a rough sense of where their superannuation balance or pension entitlement could land if they stay in the profession for another couple of decades.
AU (defined contribution): FV = Balance × (1+r)^n + Contributions × [((1+r)^n − 1) ÷ r]
US (defined benefit): Annual pension = Years of service × Multiplier % × Final average salaryAustralian teachers are almost universally in defined-contribution superannuation, where the final balance depends on contributions and investment returns. Many US teachers are instead in defined-benefit state pension systems, where the payout is a formula based on service and salary rather than an investment balance — a genuinely different calculation, not just a different set of numbers.1 What this calculator does
Projects retirement income using the model that actually applies in each region. For Australia, it compounds a current super balance plus ongoing Super Guarantee contributions (currently 12% of salary) at an assumed investment return to project a future balance. For the United States, it estimates an annual defined-benefit pension using the standard years-of-service × multiplier × final-average-salary formula used by most state teacher retirement systems.
2 Formula & professional reasoning
AU: FV = Balance(1+r)^n + Contribution × [((1+r)^n − 1) ÷ r], Contribution = Salary × SG rate (12%)
US: Annual pension = Years of service × Multiplier % × Final average salary
Replacement ratio = Annual pension ÷ Final salary × 100
These are genuinely different retirement systems, not just different tax rates on the same calculation. Australian superannuation is a defined-contribution system — the compounding formula used here is the same one used for any investment account, where both the starting balance and each year's new contribution grow at the assumed investment return. US teacher pensions are typically defined-benefit — the payout is set by a formula, not by how the underlying pension fund's investments performed, which is why the calculation uses years of service and final average salary rather than a compounding rate. The multiplier (commonly 1.5-2.5%) and the averaging period for "final salary" vary significantly between the roughly fifty separate US state teacher retirement systems, so this is presented as a generic model to be adjusted with your own state's specific figures.
3 Worked examples
⚠️ Illustrative example only — not financial or professional advice.
Annual contribution: 85,000×0.12=$10,200 | FV balance: 60,000×1.065^25≈$296,700 | FV contributions: 10,200×[(1.065^25-1)/0.065]≈$593,600Annual contribution: 98,000×0.12=$11,760 | FV balance: 340,000×1.06^10≈$608,900 | FV contributions: 11,760×[(1.06^10-1)/0.06]≈$155,000Annual pension: 28×0.022×76,000=$46,816 | Replacement ratio: 46,816÷76,000×100≈62%4 Sanity check
5 Common errors
| Error | Cause | Consequence | Fix |
|---|---|---|---|
| Entering the investment return as a decimal instead of a percentage | Typing 0.065 instead of 6.5 in the return field | The projection returns a near-zero or wildly wrong balance | Always enter percentages as whole or decimal numbers like 6.5, not as a decimal fraction like 0.065. |
| Assuming AU super and US pension calculations are interchangeable | Applying a compounding balance calculation to a defined-benefit pension system, or vice versa | A materially wrong retirement income estimate, since the two systems work on entirely different principles | Always select the correct region — AU uses a compounding contribution model, US uses a service-based formula, and mixing them produces meaningless results. |
| Ignoring future salary growth in a long-horizon AU projection | Using today’s salary as a constant input for a 20+ year projection | Understating both future contributions and the resulting balance, since salary (and therefore 12% contributions) will likely rise over a career | For a more accurate long-term estimate, periodically rerun the projection with an updated current salary rather than relying on a single calculation done early in your career. |
| Using an unrealistic final-average-salary figure in the US pension formula | Using current salary instead of the actual final-average period defined by your state plan (often highest 3-5 years) | Over- or understating the projected annual pension | Check your specific state retirement system’s definition of "final average salary" — some use the final 3 years, others the highest 5 of the last 10, which can materially change the result. |
6 Reference & regulatory links
7 Professional workflow
Common tools used alongside this one: