NoRegretsCoyote
Registered User
- Messages
- 5,766
The numbers are correct. A €25k salary growing 1.5% for 40 years gets you to €46k. Contributions at the rates outlined and a 4.0% net return get you €370k by my calculations, so basically correct.I do not think the examples given in the AE document show all values in in present day terms, e.g. when you check the footnote 25 year old Jack earning 25k ends up on a salary of 46k and a fund worth 375,000 . I admittedly haven't checked their calcs for this but I suspect that fund is worth something closer to present day values (375,000 * 25k/46k) = 203,000.
You have to adjust the contributions downwards the first 9 years. It's a quarter of the 14% years 1-3, a half years 4-6, three quarters 6-9, and then the full 14% from year 10 onwards.(25,000*.14) * ((1.035)^40 - (1.015)^40 ) / (0.035 - 0.015)
But this to me clearly means all the numbers are in inflation-adjusted terms. It's not plausible to assume a 1.5% annual increase in earnings through your working life if inflation is 2%. People generally don't earn less in real terms over a career.then I saw the asterisk mentioning salary inflation prediction - but no indication the final fund they're showing is going to be hammered by the same inflation.
For simplicity and the purposes of the examples they're doing the calculations based on the scheme being fully in place. For example they stateYou have to adjust the contributions downwards the first 9 years. It's a quarter of the 14% years 1-3, a half years 4-6, three quarters 6-9, and then the full 14% from year 10 onwards.
But this to me clearly means all the numbers are in inflation-adjusted terms. It's not plausible to assume a 1.5% annual increase in earnings through your working life if inflation is 2%. People generally don't earn less in real terms over a career.
Impossible to answer that with a yes/no.As a layman i would like a simple yes or no answer to this question."are investment returns inflation adjusted.?.Thanks
The context is the AE proposals.What's the context?
Sorry, I mistakenly thought that this was a different topic about general investments.The context is the AE proposals.
I think Brendan split it off as a standalone thread.Sorry, I mistakenly thought that this was a different topic about general investments.
I suppose i am thinking about in real terms after inflation. Sorry about my lack of knowledge.Thanks,Impossible to answer that with a yes/no.
What investment returns?
What's the context?
Where are they stated?
What do you mean by inflation adjusted?
What measure of inflation are you referring to?
Are you talking about index linked returns?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?