Kevin B Wilson has just turned 28 years of age and would like to retire comfortably on his 60th birthday. He recently finished his postgraduate degree and is now working for Dilligaf Town Planners. His ordinary times earnings are $76,000 plus $4,000 irregular overtime per year, and this is expected to remain the same indefinitely. Kevin has analysed the available superannuation funds, which have a long term return of 4%.

a. Calculate the minimum annual dollar value that his employer needs to contribute into his superannuation fund under the Superannuation Guarantee Scheme (SGS), and explain the significance of 'ordinary times earnings' with respect to mandatory employer super contributions.

4 Marks

b. Assume that Kevin wants to contribute up to $12,000 into superannuation (in total, including both SGS and salary sacrifice). How much of his salary will he need to sacrifice to achieve this?

5 Mark

c. Assume that Kevin makes $12,000 in concessional contributions every year until the age of 60. How much money is he expected to accumulate in super by this age? (Useafter tax contributionsandmonthlycompounding of 4% p/a.). At what age and under what conditions can he start withdrawing money out of super?