'Retirement' help needed.

[john]

G'Day

My wife and I have just turned 60 and looking at wind down a bit. We have had our own business for many years and have been actively investing in real estate for as many years (with few other investments), which in one way shape or form will be our superannuation so to speak. What we need now is to speak with someone professional who can give us advice as to what to do now. ie. sell some IP's and pay down debt, live on equity or a mixture of LOE and rental income, sell some and invest in income producing shares, do small developments and sell/hold etc. etc. We are both active and have always enjoyed real restate in all its facets, so we do not want to hang up the spurs totally, but would like to continue dabbling when opportunities arise. Most accountants as we all know are not capable of offering such advice as is the same with most financial planners . Recommendation as to who to contact for advice would be welcomed. Or, anyone with any advice or personal experience in our situation would also be gratefully received. Many Thanks

 

[K_Raheja]

Which City ?

 

[john]

Doesn't really matter k_Raheja as it would have to be done by email/ phone as we live in remote area . Thanks for any input you may offer.

 

[K_Raheja]

Although,I am at the other end of spectrum starting out in investing and wealth creation. You can evaluate

Lindsay Egan
EHH Chartered Accountants & Advisors
Suite 11, 431 Burke Road Glen Iris VIC 3146.
Phone: (03) - 9822 2511.


Cheers
K

 

[Macca]

Hi John,

As I don't know your circumstances I can't comment, but I do know that most accountants and financial advisers tend to look after themselves first

If you have been clever enough to accumulate a retirement nest egg then you are clever enough to work out what suits you best

The only thing I have learned is that trading the index rather than shares seems to be better for the average person.

 

[Ridin-High]

Hi John,

I would suggest listing down the pro's/con's(risks) on a piece of paper of each investment vechile that you are considering to see if they meet your needs.

Eg.

Residential property:

Pro's:

- Low volatility on return (rental yield and easy to let)
- Capital growth usually above inflation
- favorable for banks lending against

Con's

- Liable for outgoings which cannot control (council/water rates, maintenance, land tax, management fee's)
- Low net return (after considering outgoings) generally around 2.5-4% nett return
- High transaction costs to buy/sell

Commercial property

Pro's

- Higher net rental return
- stable income (long lease)

Con's

- long periods of vacantcy (no income)
- High transaction costs

Shares

Pro's

- Higher yield with fully franked dividends/tax deffered distributions
- No outgoings
- cheap purchasing costs

Con's

- Loss of capital (companys going bankrupt, decreasing in value)
- Dividends reducing

Fixed interest

Pro's

- reliable income stream
- extremely low risk

Con's

- Inflation reduces the value of your money over time

Cash

Pro's

- No Risk

Con's

-Inflation

I would have a combination of various asset classes, probably 40% residential property, 50% shares, 10% fixed interest/cash. Probably what you would consider low-medium risk

Regards,

RH

 

[kathryn d]

Not willing to give you advice, but we can tell you "our story"
Rob is 46 and I am 50. Rob has always been hands on, on a full time basis for our properties.I have just "retired" from employed employment 2 1/2 weeks ago.We each have separate roles in our business.
I scour tenants, properties, finance and he makes it work.
We have a few Ip's that will now support us completely.

We will be travelling in Australia 8 months of the year (starting in 3 weeks) and then return to Canada to manage for 4 months. This gives our supers a much needed break to enjoy our short summers here, with their young family.

Our supers (we have 2 sets, as we invest in 2 towns, 100kms apart)
They are not Property Managers. They work under our direction, and are very limited in the decision making.

We have no intention of allowing our hard earned investment to be run by a third party.They will not do a better job than us.

I guess you will need to determine how hands on you want to be.
To me property is still enjoyable..and sometimes the tenants are extremely frustrating.
I like to think of it as a real life monopoly game.

 

[kum yin lau]

Hi, depends on your income level. Have you been on the 'transition to retirement' category for tax?

I'm thinking of doing this: transfer all commercial properties into smsf & when I turn 60 [soon] draw a pension from the rental income. Once on pension, no more tax to pay & no more need to lodge tax returns.

The stuff in my personal name will still need to be reported so I will need to continue lodging tax returns.

Anyone with any comments?

KY

 

[john]

Thanks everyone for your comments . It is appreciated. Our situation is somewhat akin to kathryn d's. I guess where I was coming from is that investing and having a nest egg built up over many years is one side of the coin. On the other side is being able to use that equity/rental income in such a way that you do not outlast it and that it is arranged to legally minimise tax. The easier side of the equation in my opinion is in the accumulation phase. What to do after seems to be the mine field. Someone suggested to me that Bill Zheng miught be worth getting in touch with. Anyone had any experiences there? Thanks again...........

 

[The Y-man]

Hi John,

I am thinking this thread can go one of 2 ways:

1. a confusing array of recommendations - most of which will be genuine recommendations, and possibly the occasional self promotion - which can mean you might as well have taken out the yellow pages

OR

2. nothing much..... where people realise that what is great for them may not work for you, and send you down the garden path. Others who do offer some great services on this forum would be facing possible run-ins with the mods for self promoting.


Unfortunately, niether are really useful for you....

Also, where anyone asks "is XYZ a good company" there are several issues:
1. you don't really know if you are getting an independent view point
2. not sure if it will suit your situation
3. any negative material is likely to be removed if it will cause legal issues. (Again, such posts can be purely malicious)


I can't offer much of a response either, as

1. don't know enough about your situation, risk profile etc
2. my accountant/advisor isn't taking on any other client


Cheers,

The Y-man

 

[Macca]

Hi,

What you choose to do may also be influenced by any children or heirs. If you have no one to leave it to then it is different.

I guess you should do what you want to do, just remember to have some fun. As we age we don't always get a warning that our time is limited, make a list and get going and do all the things you want to do asap !!

Worry about the money later, once you have done your thing your living expenses will be less. You can then accumulate some more for your very old age or if you get chronically ill.

 

[WillG]

On the other side is being able to use that equity/rental income in such a way that you do not outlast it and that it is arranged to legally minimise tax. The easier side of the equation in my opinion is in the accumulation phase. What to do after seems to be the mine field.

It seems you want two things ...
1. To be able to use your equity/rental income in such a way that you do not outlast it
2. Arrange to legally minimise tax

You should be able to calculate the viability of achieving the first one without changing anything using a spreadsheet once you decide your indexed yearly living expenses and how long you expect to live ~ another 30 years.

The second one can involve various strategies such as income splitting using structures, superannuation(self managed or other) etc

You should do some reading and understand the risks of all the options before talking to a financial advisor. A good accountant should be just as important to help minimise tax

 

[grossreal]

hi
couple of things
first sit down and work out how much you need to live the life style you wish to live
sound funny well most people have no idea how much it will cost just to live
the average over 55 costs about 35k
thats each
then work out how long you think you both will live for
this is a bit harder to do
the multiply the two
and thats what you need to have comming from your investments
now what you need to look for is investing with equity or capital
with min risk this is not easy and not for a board
next
when you know what you need then you need to set up a structure that can adjust to allow income of finance to flow in the way you require
forget about minimise tax you are over tax you want to min a bank balance or you will lose all those other things that over 55 and 60 get and you want to tap into those so you need to have a structure that will allow this
hell of alot of over 60 self funded retirees right now have
a no pension
b non of the normal pensioner entitlments(because they are self funded retirees) and are trying to live on under 200 per week because the funds are frozen
so try to stay out of that mix
maybe a bit late to start to set a structure but better late then sorry.
a your age the structure will be a bit different in that its just asset protection
and reduce cash input with high company expense
so you work part time for a new co company and it pays everything.
yes you have to pay fringe benifits but can add to the income as it will be tax free anyway
you need to structure the payment so they hit you under the thres hold but thats fine.
for me you need to first structure and then invest but invest using equity as you will fine that you can do a bit more with equity lending then most people understand.
also you will find that you will have a bit more time on your hands
this time can be used to assist younger people to reach your position
and again this can be a form of income stream
I tell alot of people don't have one income stream
two then three then four income streams become a river and the rivers become a sea
it starts with a trickle
you are not at the end of the invest cycle you are at the start
its just your start is in a different position to others
but start it is
sell ip's
why
sell to buy not sell just to sell
just my ideas and don't think of this is anyform of investing advice
the current requirements tell me I need to say this

 

[john]

Thanks again everyone for your well thought out responses which is why this is such a great site for swapping knowledge. I sort of realised after posting that I was probably looking for a somewhat simplistic answer when there really wasn't one to be found. There are far too many variables .

And your comment Grossreal - "you are not at the end of the invest cycle you are at the start, its just your start is in a different position to others but start it is" really hit the spot, even profound. Which is why I don't like using the word 'retirement', as I have no intention of really retiring for some time to come .