Default Settings
(a) Sunset horizon is 25 years.
(b) Inflation rate is 3%.
(c) Tax rate is 33%.
(d) Growth rates (i.e., annual rates of return) are subject to tax.
(e) Growth is accredited at year end.
(f) Managed Fund growth rates (nett of fees) by fund type are:
- Conservative 2%
- Moderate 4%
- Balanced 8%
- Growth 10%
- Aggressive 12%
(g) Amounts:
- increase each year by the rate of inflation
- after the initial amount (now) are future values
- are withdrawn annually, at the start of the period
Assumptions
(1) During the Sunset horizon:
- Growth rates are constant
- Inflation rate is constant
- Tax rate is unchanged
- No fees on withdrawals
(2) With selected investments:
- Doesn’t make partial withdraws
- Doesn’t make lump sum payments
(3) With Shares, growth rates imply other financial benefits gained (e.g., dividends, share splits).
TOP