(1) extra money in super means a lower FIRE lump sum amount at age 40. But it means I can draw down on the principal more agressively, with the promise of access to larger super at 60(?). Will this mean an earlier or a later FIRE? No idea. I'm keen to hear your advice.
Does salary sacrifice in to super give a person an earlier or a later FIRE?
Most likely an earlier FIRE. The math requires Excel and some assumptions about future investment return, inflation and taxation.
You need to get the proportions in and outside of super right, so you don't run out of money before you can access super - and you need a little more money in total (like ~5% extra in total), as you will be drawing more than your SWR off your investments outside of super.
But depending on your tax situation, you should be able to FIRE earlier even saving to 105% because you have more cash to invest because you lose less to tax. As has been said already, the higher your salary, the more effective this is.
edit: I attached the basic spreadsheet I used to work this out.
Notch, this is amazing, I just had a huge epiphany. And such a simple spreadsheet!
Let me use an example from the attached spreadsheet.
at line 18, A 40 year-old with $32,094 annual spending needs x25 = $802,353 to retire. (4% rule).
The 40-year old could do this by having $802,353 in regular investments (outside super).
But we can use an easier method than saving up $802k outside super.
We can have $457,819 outside super and $374,485 inside super. (This adds to 832,304)
$457,819 is the minumum needed to live from 40 to 60 without any other income.
$374,485 is the maximum we should have in super. any extra is not needed.
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But, saving $457k outside super and $374k inside super is much easier than saving $802k outside super!
Am I on the right track here?