Superannuation performs the important role of matching savings and investment flows and accommodating different risk preferences among savers and investors. In the financial system, the focus has been on banks and capital markets, but now superannuation has grown to be part of this mix. In Australia, Superannuation fund is obligatory for all people in Australia that is intended to build and guarantee the level of retirement funds for the working populace. Representatives are not permitted to withdraw the superannuation cash until retirement. As Australia is moving into a demographic time of a maturing populace, individuals are saving in anticipation of nearing retirement from the workforce. Australia also provides taxation incentives in order to save for retirement.
I was born in 1960, as a 55-year-old worker in Australia, and after 20 years I am going to retire at the age of 75. To make a living after I retire, I considered to do some investment into my superannuation saving. Therefore, according to my personal situation, and to assess the market risk, I am going to choose Capital guaranteed because I am only 20 years of work time left so that I should not take too much risk from it, Although Capital guaranteed only can get low return which is 2%, it also has low risk. This type of investment is suitable for people like my age.
In my next 20 years work time, my salary for each year is $120000 and it is include my superannuation fund which 9.5% in my gross salary. So, $120000 times 9.5% equal to $11400. The Capital guarantee’s yearly return is 2% (0.02) and my work time is 20 years. Through the calculate formula, my next 20 years superannuation fund return amount is $276990.02.
After retired in my 75-year-old. I am still single and spend $23000 for each year to my own personal use. Comparing with my superannuation fund, I realise that I do not have enough money to spend in my remaining time...