Baby Boomer nearing retirement, no investments, no super...HELP!

Hi all,

My daughter has been talking about this site for some time now and after lurking for a few months I've decided to post our situation to hopefully receive some advise/tips to improve our position at retirement.
(I know....we've left it a bit late!) But better late than never right? :confused:

Our situation is this:

PPOR Value $600K owe $120K

Savings $20K

Super - Not enough to even mention

No other Debt.

Self Employed - $80K gross between us.

My question is: With only approx 10 years to go to retirement, what strategy/techniques would you suggest to make the most out of this time to increase our nest egg*?

*Note: As you can see, we barely have a nest egg and should we do nothing, we would be relying on the pension to fund our retirement.

I have been reading all sorts of books to educate myself as much as possible but would love to hear from real 'everyday' investors like yourselves for any thoughts and suggestions.

Thanks in advance

My question is: With only approx 10 years to go to retirement, what strategy/techniques would you suggest to make the most out of this time to increase our nest egg*?

Hi Maree, this is a post that describes my chosen Investment Strategy that involves Villas & Townhouses. It maybe of interest to you as it suits what you are wanting to achieve and in the time frame you want to do it in.

The capital growth averaging (CGA) strategy I employ utilises a regular purchasing cycle similar to what Dollar Cost Averaging is to the sharemarket. The major underlying principle to its success is it relies on your "time in" the market, NOT "timing" the market, and never never sell. So in other words it does not matter whether you buy at the top of a boom or at the bottom, just so long as you purchase good quality, well located property in high density areas ( metro area capital cities), at or below fair market value, on a regular basis.

I've basically been purchasing an IP per year. Currently we're into year 9 of this 10 year plan and to date we've built a multi $million property portfolio spread across Australia.

We've been purchasing new or near new property over older style property for several reasons, the main ones being (in no particular order) -

1/ To maximise my Non-Cash deductions
2/ To minimise my maintenance & repair costs
3/ More modern & Attractive to tenants - thereby minimising potential vacancy rates
4/ Ask a higher rent - thereby Maximising yields

Without getting into the "which is better debate, houses or Units??", I preferr to purchase Townhouses & Villas with a 30% or greater land component thereby eliminating multi story units or high rise apartments, for several reasons. The mains ones being (in no particular order) -

1/ lower maintenance & upkeep for the tenant
2/ lower purchase or entry level into a Higher capital growth suburb area
3/ rapidly growing marketplace (starting both now & into the future) wanting these type properties. This is due the largest group of people to ever be born (being the Babyboomers and Empty nesters) starting to come into their retirement years. They will be wanting to downsize for the following main reasons - lifestyle & economic.
4/ greater tax advantages & effectiveness thus maximises cashflow.
5/ able to hold more individual properties spread across your portfolio - thereby minimising area over exposure risks by not holding all your eggs in only a few baskets, so to speak

I look to buy in areas with a historic Cap growth of 7%pa and/or are under gentrification. I look to where the Govt, Commercial, Retail, private sectors are injecting money. This ultimately beautifies the area and people like the looks so move in creating demand.

I have found this works well if you are looking for short to medium term capital growth so as to leverage against and build your portfolio faster.

Getting back to CGA, as the name suggests it averages out the capital growth achieved on individual properties with your portfolio throughout an entire property cycle, taking into account that property doubles in value every 7 - 10 years. Thats 7%pa compounding.

The easiest way to explain what Im meaning by this is to provide a basic example taking into account that all your portfolio cashflow will be serviced via Wages in the acquisition stage, Rental income, the Tax man, an LOC and/or Cashbond structure, and any other forms of income you have available.

For ease of calculation lets say we buy a property for $250k, so in 10 years its now worth $500k. Now lets say we do that each year for the next 7-10 years. Now you can quit the rat race.

So in year 11 ( 10 years since your 1st Ip) you have 250K equity in IP1 you can draw out (up to 80%) Tax free to fund your lifestyle or invest with. In year 12 you do exactly the same but instead of drawing it from IP1 you draw it from IP2. In year 13 you do the same to IP3, in year 14 to IP4, etc etc etc. You systmatically go right through your portfolio year by year until you have redrawn from each property up to year 20.

So what do you do after you get year 20 I hear you say ?? hmmm..well thats where it all falls into a deep hole - You have to go get a JOB - nope only joking!

You simply go back to that first IP you purchased as its been 10 years since you drew upon it first time around and its now doubled in value ($1M) yet again - so you complete the entire cycle once again. Infact chances are you never drew each property up 80% lvr max , so not only have you got entire property cycle of growth to spend you still have what you left in it first time round that compounded big time. Now you wealth is compounding faster than you can spend it! What a problem to have.

Getting back to what I said in my opening paragraph about it does not matter where you buy within a property cycle just so long as you do buy, This is because you will not be wanting to draw upon it until 10 years later after its achieved a complete cycle of growth.

Well that’s the Basic Big Picture of CGA. Once set up & structured correctly it’s a self perpetuating source of tax free income indexed for life!

For further information please follow the link to this "We've Done it" thread I started some time back.

Maree, if you require any clarifications feel free to PM me.
I am probably the only one here who will state, upfront: You can't do it with property. :D

I was where you are myself and the only thing that might work is what I am trying (it's looking good so far) that is punting on the resources boom which is (to my mind) the safest bet on offer.

But I believed in the resources super-cycle many years ago.
I am speachless, retirement is around the corner , and you are just thinking about this now, i have no answer for you , but you leave it so open for me to be smart about the situation , but i won't,:confused: sorry.
I think Sunfish is a bit on the pessimistic side.

The leverage through borrowing on a sound property investment can pay off well.

The issue you need to consider is to ensure your strategy is as low risk as possible so that you avoid losing any of your existing capital. My strategy has involved multiple tenancies bought at a high yield.

Your strategy needs to consider how you will cover the costs if either of you are unable to work eg insurance. Look at income protection insurance which is normally tax deductible for self employed people.

Next what is your sleep at night factor. Are you comfortable with borrowing something more on your house and investing that?

Are you prepared to make sacrifices now over the next 10 years for a better retirement. Even something like investing into superannuation could be beneficial particularly over the next couple of years when over 50 year olds can put $50K in each.

Where are your strengths and interests? Can you add value by renovating or is buy and hold better for you.

Read the interviews forum.

Good luck
I think Sunfish is a bit on the pessimistic side.

The leverage through borrowing on a sound property investment can pay off well.

But in the time frame quoted UNLESS you are very good at what you do, it won't work. Nobody acknowledges that had I (personally, it was the best advice offered here) bought a "Greater Sydney 3 br BV" seven years ago I would still be struggling today. No way would there be anything to retire on.

Alternatively, I bought some shares which have shown 1,400% gain in six years with absolutely ZERO input over the years hence. That's like finding bonanza gold and ten years is a short time frame to find that, I'll admit. But I have a watch list of a few others which may do it. :D

ps. leverage only works if the asset is increasing in value MORE than the interest paid. The biggest fraud presented to the readers here is that "leverage" is not a two edged sword.

What you suggest has NOT been true in the market I know for the last few years and to suggest that it is somehow "guaranteed" in the broad market is disingenuous.
...and to add to the contribution of Mr Fish, the sort of LOE thinking promoted here and elsewhere is predicated on the assumption that a lender will allow you to borrow against the equity. As many are finding out, this should not be taken as a given, and given both current credit restrictions and the implications of the NCCP act, is an unwise assumption to bae a life plan on.

Any property-based strategy needs to work on the assumption that equity can only be realised by selling the property - either in whole or in part. If it doesn't work under those conditions, it may not work at all.


Perhaps you should get a picture of where you want to be in 10, 15 and 20 years from now first.

For example ...
I suspect you would at least want to have the house you are living 'debt free' within 10 years - are you capable of saving $120k in 10 years? If not, you may need to downsize.

You might want at least $300 to $400k in savings/investments/super/equity in 10 to 15 years to make life a bit more enjoyable.

Based on the above 'plan', how can buying investment properties help you get there?

Assuming a well selected property will double in 10 years, if you buy a $400k property now, you will end up with $400k equity in 10 years. Coupled with saving $12k per year, you can achieve your goals!

I suggest you have a think about where you might want to be and keep asking questions.

Hope this helps
Hi all,

Here we go again, long time posters and readers will understand..


1. You need to work out what you need in 10 years time to 'retire' on.

2. You need to work out how much your willing to spend to get there.

3. You then need to examine the possible options available to see if it is possible to get to where you want to be, and if you will be comfortable with the risks involved.

Are you prepared to make sacrifices now over the next 10 years for a better retirement.

This is key to success. Spend less than you earn, which appears like it may require a lifestyle change.
Marrob, amongst the books you have been reading, have you seen "The Millionaire Next Door"? It may help make the lifestyle changes required to succeed.
A person's experience with a particular asset class will have an influence on the advice they give. Eg I had a bad experience with shares, having geared up just before the GFC, and so am more comfortable with property. With your asset base and timeframe, you don't want to make big mistakes, so I'd suggest reading lots, talking to a couple of financial advisers (the first consultation may be free), then querying their advice, and really thinking about what sort of investor you are. For instance, if a share portfolio was to drop by 30% how will you react? If you could afford to invest in only one property, where would it be, and why?

At least you are about to start to be responsible for your retirement comfort and you have 10 + years to plan, refine that plan after some good and bad experiences. ;)

1. You have No super? Why not?
Action Think about opening Super Fund and go to and there is a calculator to work out how much to contribute to get a partial government co-contribution. Ask your Accountant's advice

Salary sacrificing may be an option for you?? I don't know, it is up to you to find out.

2. PPOR - it that a principal and interest loan or interest only - educate your self on the difference and why one may be more advantageous to you at different times.

3. Rixter's strategy is good, Rob has a good strategy too IMHO [Look for it on SS or someone will post the link].

Pay attention to what Token Funder has said and develop your own plan of what you can achieve or more importantly what you will sacrifice to get to where you want to be.

Example Plan - Buy a 2 or 3 bedroom unit up to 300K as an IP with I/O loan rent out for 10 years then sell your house put PPOR money in offset loan (maybe pay off IP unit you are now living in OR not) Extra money from house could be placed into Super if over 60 years.

4. Shares - Could be part of your retirement and there are some good share traders BUT don't count on it, I have been trading shares off & on for 10 years and it is mentally hard work at times and you have to educate yourself.

5. You could always work longer eg to 70 years of age then work part time. This should be your motivation now if you want retirement.

6. Two heads are better than one - your daughter must have some ideas if she referred you to this site. Discuss and post her thougths on what you can do here. Won't happen in one year BUT 10 years can be a good timeframe.

Good Luck
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I am not advocating high leverage, in fact on my IPs my highest LVR has been 70%, my current LVR is 36% and alter this year I might increase to 60%.

My investing has been cautious to prevent the loss of capital because I did not have much to start with.

My rents are more than twice my P & I mortgage repayments.

I am not advocating Living Off Equity.

I am also assuming Marrob is wanting the potential for a more comfortable retirement but not necessarily replacing the whole 80000 income in 10 years.

What I have done so far is in less than 10 years.

So Marrob it is not too late provided you start.
youre situation auint that bad

Your house will be paid off.

here is what you should do.

But a unit for 250k. Put down 10 percent and borrow interest only.

In 10 years it should double in price. Theres your 250k super.

In 10 years sell your 1.2 million dollar house.

Theres your 1.45 mill in assets and cash with 250k in debts.

In 10 years time either move into your unit or buy another small house/unit for 500k

And whats wrong with the pension to prop up your retirement.

Millions worse of than you - keep your chin up!

Marrob, the difficult part is deciding where you want to be in 10 years time. If you want to be travelling the world first class then your options will be different to growing vegetables in the country.

Do you plan to live in your current house until time takes you away? If so put every possible dollar into removing the 120k you owe and look at creating a second income from the property with a granny flat, second house on the block or whatever. At the same time start putting at least 10 percent of your salary into your industry super fund. I'd also suggest buying one non-collectible gold coin, Kruggerand or whatever, each month or so for the next 10 years and selling them for the luxuries you want in retirement. I don't trust shares - let your super fund worry about that one. Increase your super contributions whenever you get a windfall - that is after you've put away a couple of thousand cash at home so you can deal with emergencies and bills without resorting to credit cards beyond the free credit days.

If you plan to downsize, move to the country, or whatever, you can either buy somewhere now on equity from your home, going for a cash flow positive property that eventually you can move into, slowly making it your dream retirement home courtesy of negative gearing (with solar everying and water tanks etc).

You do this with the assumption that the cost of your dream home will inevitably increase over the next ten years, so you save by buying now. You might even decide to stay in the neighbourhood and live in the dual occ you've created on your block as per paragraph above if this suits your plans and grab the additional rent your original house would fetch.

You've ten years to get it all together but decide about a specific retirement plan, not just a general 'retirement'. Then you have an aim and something to focus on - and that helps count the dollars. At the moment we live in the land of plenty so grab every chance to harvest for the future whilst it is still relatively easy.

My bias in this advice is that I think small living is the way of the future, we're headed toward a single world currency and financial shenanigans and deceit by governments (super and pensions included), old people have no political power and even less in future, and everyone wants your money.

That is why I'd also suggest buying one non-collectible gold coin, Kruggerand or whatever, each month or so for the next 10 years and selling them for the luxuries you want in retirement you retirement. (google gold bug commentaries, add lots of salt and you still have a reason to hold some gold). I personally don't trust shares - let your super fund worry about that one - and put away a couple of thousand cash at home so you can deal with emergencies without resorting to credit cards beyond the free credit days.

p.s. and get a good accountant to minimise tax and leverage your super to best advantage. Someone who knows about Transition to Retirement.
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Maree, the postive thing is that you have recognised the problem and have a 10 year time frame to do something about it.

Study up on different strategies but the main thing is to actually DO something.

As well as your chosen strategy, don't forget to put $1,000 each into super so that you get a large part of the $1,000 co-contribution from the Government. At $40K income each, that should give you each around $500 (?) or so from the government, a $1000 gift to your super funds each year that this scheme continues.
at your stage of investing - you need to chase cashflow, not growth. you've had your entire life to take advantage of growth, now that window is closed unless it's a longer-term strategy, inheritence/legacy etc.

in other words, if you're 65 you could still look to growth if your plan is to work until 75.

if not, chase the cashflow thru (traditionally) lower growth / higher yielding assets, or commercial investments, high yielding shares or grow some cash by investing in property trusts.

for the shares option - remember, it's not about the value of the share anymore at this stage - it's about the dividend paid on initial investment. capital growth will be a "windfall" by-product, not the sole reason to invest.

if you put in $100k looking for a 10% dividend, and the portfolio "fell in value" to $75k, it's inconsequential, because the dividend is still paying 10% on your initial $100k.

essentially, you're looking to replace income, not look for growth. any interest payable to do this is also generally tax deductible - there a few circumstances where it isn't though.

clear as mud?
As well as your chosen strategy, don't forget to put $1,000 each into super so that you get a large part of the $1,000 co-contribution from the Government. At $40K income each, that should give you each around $500 (?) or so from the government, a $1000 gift to your super funds each year that this scheme continues.

It'd be about $730 each (assuming income is split $40k ea) for this FY, and you only have to deposit $730 each.
(It's $1 for $1, max $1000 - but maximum is reduced by any income over $31,920)

In a few years time it'll increase to $1.25 for every dollar you put in, then $1.50 a few years after that (like it was last year).

Information all here:

Over 10 years you could add $34,000 (+ investment earnings) to your super at the cost of $1460 a year (total $14600).

(Remember - Must make deposit from after-tax income.)
You have had a lot of suggestions so far. You really need to pick what will suit yourself and your comfort / risk level. I don't know your age, but would you consider working for more then 10yrs (there may not be much choice - even if only part-time) or is that non-negotiatable.

Personally... I would look at investing in positively geared properties, using every spare $ to pay off your PPOR a.s.a.p - then paying down the mortgages on the IP's one by one after that. This means that you would be able to pay off your home faster and you would have an income coming in from the IP's in retirement. I would also recommend seriously considering increasing your super contributions.

I am not very knowledgable about shares, so I won't even broach that subject. But it is certainly worth looking at. I beleive diversification is essential to successfully setting yourself up for retirement.

You need to ask yourself - What kind of weekly income would you need to support yourself in retirement? and how can you set yourself up so that you can acheive this income so that you can retire from work? Come up with your most conservative figure and your most outrageous figure - then you can aim for the highest one, because it is likely to be more accurate. ;)

Better late then never. But don't RUSH into anything, just because your feel panicked about a lack of time. Make sure you do your due dilligence, you don't want to be set back any further.

Maybe buy a couple of copies of money magazine and have a read of the articles in there, and shop around for a good financial advisor.