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Figures are based on a real rate of return of 4% pa after inflation of 3% pa (total return of 7%pa) after fees and taxes.
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Superannuation Guarantee contributions of 9% ongoing.
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Ongoing voluntary contributions of 1% a year, increasing by an additional 1% each year to a maximum of 6% ongoing (combined contributions of 15% of salary ongoing for 20 years).
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Salary increase of 3% each year until age 65.
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Contributions tax of 15%.
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Length of retirement 20 years, retirement capital will be fully extinguished in 20 years.
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Annual retirement income assumes income drawn at the beginning of the quarter and quarterly compounding returns of 7%.
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With respect to inflation the purchasing power of the incomes in 20 years time is estimated as $26,646 (for the $49,000 income) and $22,024 (for the $40,500 income).
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