Often I see ads on TV promoting superannuation using examples with large payouts to excite people thinking they'll have a huge bonus when they retire. Next time you see one of the ads note the payout amount and how many years until they retire.
For example let's say someone will retire in 35 years with a nest egg of $300,000. The amount $300,000 would be like winning tattslotto today and would go a long way towards buying a small unit. Certainly you could buy 10-15 cars for that amount. But what can you buy in 35 years. To see what tomorrow's dollar is worth in today's term you need to use a Present Value Calculator. I've written one and make it available using the following link (http://www.justlocal.com.au/clients/present-value-calculator/).
OK. Enter $300,000, 35 for the number of years and 5.8 for the interest rate. The figure of 5.8% is the average CPI since 1970. So how much is $300,000 worth. The sad answer is it could be worth as little as a year's salary at around $40,000. Not much really.
I remember my father who felt is was very important to put away extra for super. When he retired he ended up with a super plus a part pension. The problem he found was he was worse off than those on a full pension as he didn't get all the benefits of the pension. I haven't kept tabs on what happens if you end up on a part pension today. But if the same happens in the future the government will save a considerable amount with reduced pension payments and possibly even reduced pension benefits, all the while having people believe they'll end up with large superannuation payouts.
The Present Value Calculator can help you to make a better informed decision taking away the emotional aspect of the big win. You can also find the Present Value Calculator and other calculators I've written on my apps page which I share using my JustLocal service. Instead of entering a postcode enter the words apps in JustLocal and you'll go to the apps page. You can also go direct to the page by entering www.JustLocal.com.au/apps.
Kelvin Eldridge
Online Connections
www.OnlineConnections.com.au
Call 0415 910 703 for computer support.
Servicing Templestowe, Doncaster, Eltham and the surrounding area.
For example let's say someone will retire in 35 years with a nest egg of $300,000. The amount $300,000 would be like winning tattslotto today and would go a long way towards buying a small unit. Certainly you could buy 10-15 cars for that amount. But what can you buy in 35 years. To see what tomorrow's dollar is worth in today's term you need to use a Present Value Calculator. I've written one and make it available using the following link (http://www.justlocal.com.au/clients/present-value-calculator/).
OK. Enter $300,000, 35 for the number of years and 5.8 for the interest rate. The figure of 5.8% is the average CPI since 1970. So how much is $300,000 worth. The sad answer is it could be worth as little as a year's salary at around $40,000. Not much really.
I remember my father who felt is was very important to put away extra for super. When he retired he ended up with a super plus a part pension. The problem he found was he was worse off than those on a full pension as he didn't get all the benefits of the pension. I haven't kept tabs on what happens if you end up on a part pension today. But if the same happens in the future the government will save a considerable amount with reduced pension payments and possibly even reduced pension benefits, all the while having people believe they'll end up with large superannuation payouts.
The Present Value Calculator can help you to make a better informed decision taking away the emotional aspect of the big win. You can also find the Present Value Calculator and other calculators I've written on my apps page which I share using my JustLocal service. Instead of entering a postcode enter the words apps in JustLocal and you'll go to the apps page. You can also go direct to the page by entering www.JustLocal.com.au/apps.
Kelvin Eldridge
Online Connections
www.OnlineConnections.com.au
Call 0415 910 703 for computer support.
Servicing Templestowe, Doncaster, Eltham and the surrounding area.
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