Question

In: Finance

You have a job offer ($40,000 per annum, plus 9.5% super. Your salary is expected to...

You have a job offer ($40,000 per annum, plus 9.5% super. Your salary is expected to grow with the CPI each year, CPI is 3% per year.)

Your super fund is returning an expected 5% per year.

You are 26 years old and plan to retire at age 65, and assume you require $40,000 per year in present value $ from super fund when you retire.

Super earnings should be calculated based on the opening superannuation account balance.

1. Provide an excel spreadsheet of accumulated super for each year through to retirement.

Use the following headings in spreadsheet (year, age, salary, opening super balance, add employer super contributions (9.5%), less contributions tax (15%), add earnings (net of tax), closing super balance).

2. Provide an excel spreadsheet illustrating the withdrawal of the accumulated superannuation commencing retirement, detailing how long your superannuation is likely to last.

use the following headings for spreadsheet (year, age , opening pension balance, less pension withdrawal (real income required), add net earnings, closing pension balance)

Thanks, just looking to double check my numbers are correct!!

Solutions

Expert Solution

Please find the answer below, for year 20 after retirement only $20,000 can be afforded due to non-availability of balance in a superannuation fund.

For Question No 2
Year Age Opening Super Annuation Pension Withdrawl Earnings Closing
1 66 $522,726 ($40,000) $22,215.84 $504,942
2 67 $504,942 ($40,000) $21,460.02 $486,402
3 68 $486,402 ($40,000) $20,672.07 $467,074
4 69 $467,074 ($40,000) $19,850.63 $446,924
5 70 $446,924 ($40,000) $18,994.28 $425,919
6 71 $425,919 ($40,000) $18,101.54 $404,020
7 72 $404,020 ($40,000) $17,170.86 $381,191
8 73 $381,191 ($40,000) $16,200.62 $357,392
9 74 $357,392 ($40,000) $15,189.14 $332,581
10 75 $332,581 ($40,000) $14,134.68 $306,715
11 76 $306,715 ($40,000) $13,035.41 $279,751
12 77 $279,751 ($40,000) $11,889.41 $251,640
13 78 $251,640 ($40,000) $10,694.71 $222,335
14 79 $222,335 ($40,000) $9,449.24 $191,784
15 80 $191,784 ($40,000) $8,150.83 $159,935
16 81 $159,935 ($40,000) $6,797.24 $126,732
17 82 $126,732 ($40,000) $5,386.12 $92,118
18 83 $92,118 ($40,000) $3,915.03 $56,033
19 84 $56,033 ($40,000) $2,381.42 $18,415
20 85 $18,415 ($19,197) $782.63 $0

Related Solutions

Your salary next year is expected to be $40,000. Assume you expect your salary to grow...
Your salary next year is expected to be $40,000. Assume you expect your salary to grow at a steady rate of 4% per year for another 27 years. If the appropriate cost of capital (aka discount rate) is 11.2%, what is the PV today of your future salary cash flow stream? For simplicity, assume the salary amounts are at the end of each of the next 27 years. Answer to zero (0) decimal places.
Your salary next year is expected to be $40,000. Assume you expect your salary to grow...
Your salary next year is expected to be $40,000. Assume you expect your salary to grow at a steady rate of 4% per year for another 25 years. If the appropriate cost of capital (aka discount rate) is 9%, what is the PV today of your future salary cashflow stream? [For simplicity, assume the salary amounts are at the end of each of the next 25 years.] Please provide calculations using excel and financial calculator.
You have just been offered a job. Your base salary will be $90,000 per year and...
You have just been offered a job. Your base salary will be $90,000 per year and the first year’s annual salary will be received one year from the day you start working. You receive a bonus immediately of $12,500. Your salary will grow 4 percent per year and you will receive a bonus of 10 percent of your salary. You expect to work 30 for years. Your discount rate is 11 percent. What is the present value of your offer?...
You have just been offered a job. Your base salary will be $95,000 per year and...
You have just been offered a job. Your base salary will be $95,000 per year and the first year's annual salary will be received one year from the day you start working. You receive a bonus immediately of $12,500. Your salary will grow 4 percent per year and you will receive a bonus of 10 percent of your salary. You expect to work for 30 years. Your discount rate is 10 percent. What is the present value of your offer?
You have just been offered a job. Your base salary will be $90,000 per year and...
You have just been offered a job. Your base salary will be $90,000 per year and the first year’s annual salary will be received one year from the day you start working. You receive a bonus immediately of $12,500. Your salary will grow 4 percent per year and you will receive a bonus of 10 percent of your salary. You expect to work 30 foryears. Your discount rate is 11 percent. What is the present value of your offer? Group...
If the average starting salary in your chosen job is $40,000, what is the maximum student...
If the average starting salary in your chosen job is $40,000, what is the maximum student loan debt you should borrow to keep your monthly payments manageable?
You approach ABC Bank for a loan. They offer a rate of 5.40 percent per annum...
You approach ABC Bank for a loan. They offer a rate of 5.40 percent per annum on a mortgage amount of $750,000 over 22 years, with installments payable at the end of each month (Hint: the last installment will pay off the mortgage). A rival Neobank named Big Loan Ltd offers a rate of 5.10% per annum however with fortnightly installments, on the same amount with the same term of maturity of 22 years. a) Calculate the loan installment payments...
You approach ABC Bank for a loan. They offer a rate of 5.40 percent per annum...
You approach ABC Bank for a loan. They offer a rate of 5.40 percent per annum on a mortgage amount of $750,000 over 22 years, with instalments payable at the end of each month (Hint: the last instalment will pay off the mortgage). A rival Neobank named Big Loan Ltd offers a rate of 5.10% per annum however with fortnightly instalments, on the same amount with the same term of maturity of 22 years. a)   Calculate the loan instalment payments under...
Calculate salary plus commission. Gene Jordan receives a salary of $440 per week plus 18% commission...
Calculate salary plus commission. Gene Jordan receives a salary of $440 per week plus 18% commission on all net sales over $2,800. Gene's total sales last week were $5,500. Returned sales were $1,250. What would Gene's gross earnings have been if there were no returned sales?
How did your response affect the job offer ( or lack of an offer that you...
How did your response affect the job offer ( or lack of an offer that you recieved?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT