Many of their clients have been observed to enquire about the consequences of withdrawing funds from their super funds before retirement.

Given:

- the client's current age 50

- The client's current super balance (in dollars): $200,000

- The client's desired withdrawal (in dollars): $80,000

- Desired annual income between ages 65 to 85, inclusive, for males, assumed to be paid at the end of every year (so the first payment is at age 66; the last payment is at age 85). This is the client's desired, or target, RIS.

- CY22, the Australian 10-year government bond yield for calendar year 2022 (i.e., the 10-year government bond yield on 31 December 2022, a j2 rate). * We will adjust this rate, by adding 170 basis points to it, and assume this is the (constant) level of interest rates from the current time into the foreseeable future. Assumed 4.05%.

Calculate:

(a) 'Super balance now'?

(b) 'RIS falls at 65'?

(c) 'Target RIS at 65'?

(d) 'Target capital at 65'?

(e) 'Annual contribution to target RIS'

(f) 'Annual contribution if no withdrawal'

(Subject: Financial Modeling)