Hi,

I have got my assignment.

I have to calculate the retirement savings balance with the following assumption:

Client - Test, Age - 33

1) Salary - $100,000
2) Inflation - 3%;

3) SG - Contribution from employer (pa) - 9% of salary;
Tax on this 9% is 15%. so in this case, 9% is $9,000, tax will be $1,350.

5) Salary Sacrifice - contribution from employee -3% of salary;
Tax on this is same i.e. 15% of 3%. so in this case 3% is $3,000, tax will be $450.

6) Client is working till age 56.

I have to calculate the balance of retirement savings @ age 56.

We do not have to consider his cost of living. Just focus on retirement savings.

I know I can use FV formula, however will take into consideration inflation each year. As each year the value of income will increase by 3% which will increase the SG (9% of client income; contribution by employer) and Salary Sacrifice (3% of client income; contribution by employee).

Please advice, its really important.