Question
Bill recently graduated from university and has started full time work. His starting salary is $65,000 p.a. and his employer is paying him mandatory employer
Bill recently graduated from university and has started full time work. His starting salary is $65,000 p.a. and his employer is paying him mandatory employer contributions of 10.5% p.a which are contributed quarterly in arrears into his superannuation fund. The long-term expected average compound rate of return for the fund is 7.6% p.a. Tax on contributions is levied at 15%. The average rate of salary growth is 4% p.a.
What is his expected accumulation value (EAV) over 30 years?
How is the EAV projection useful for clients?
What warnings would you give to clients after calculating their EAV?
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