You "Only" Need $1m to retire comfortably.

A couple with a house paid off earning say $55,000 (5.5% return) or $27,500 each after tax (no tax in some instances) would be plenty to retire on.
 
$1m in shares split across a couple, paying fully franked 4% yields would result in roughly $57k tax free income indefinitely without drawing down capital.

Plenty for a retired couple assuming paid off house.
 
Well if you retire at 65 and plan to live another 20 years. So that's 1m smackaroos divided by 20 years equals 50K pa. Well that's doable. Just keep a loaded revolver under the pillow in case you turn 86 lol.
 
I've figured out that I'd want about $2.5M in unencumbered property assets outside my own home for my own retirement.

This would deliver an income of at least $100k. You could do it on less via the share markets, but that's also more volatile in both capital gains (which is not a concern) and dividend yield (which is a concern).
 
Don't forget that from aged pension eligibility age, the couple can receive part aged pension starting at around $10,000 and increasing annually if the stash declines because the 'conservative' conservative 5.5% annual return isn't realised. Those numbers to pull $55K pa until age 90 sound pretty achievable to me.

In the interest of balance here's the other side of the story: https://au.pfinance.yahoo.com/compare/savings/article/-/27215600/super-expert-says-1-million-isn-t-enough-for-a-comfortable-retirement/

I would be embarrassed if I could only pull $33,717 pa from $1M. Anyone who puts all their retirement money in term deposits is just trading the medium volatility risk of a balanced portfolio with the almost certain deflation risk of fixed interest investments :eek:
 
If you leverage $1M, you can buy a $3M commercial IP that makes 8% and costs you 7% (of the loan) including costs.

So this would get you $100k in the first year.

Very rough example, but it shows that it's plenty to live on.
 
If you leverage $1M, you can buy a $3M commercial IP that makes 8% and costs you 7% (of the loan) including costs.

So this would get you $100k in the first year.

Very rough example, but it shows that it's plenty to live on.

that's a very skinny margin to be leveraging up on and depending on thru retirement. In 10 years IRs could be back to 18%, bankruptcy at 75 doesn't sound like much fun
 
I've figured out that I'd want about $2.5M in unencumbered property assets outside my own home for my own retirement.

This would deliver an income of at least $100k. You could do it on less via the share markets, but that's also more volatile in both capital gains (which is not a concern) and dividend yield (which is a concern).

I'm with Terry and think that's too much and just being greedy, especially if you're a couple with no children. $100k a year with a paid off house is a crazy amount to live on, $300 a day, every day of the year. Plus you'll have to work for an extra 15-20 years when you could've retired in your early 40's on $50k a year when you're more active and your health is much better.

Also keep in mind that 17% of Australians die before they reach retirement age from natural causes or accidents. It would be a shame to spend so much of your life working and accumulating property if you can't take it with you or benefit from what it can provide you in terms of lifestyle. Property is merely the vehicle to finance your chosen lifestyle.
 
If you take into account equity drawdown as well as income 1 Million is heaps, 60K+ a year for 35 years before it runs out, retire at 50 easily.
 

Sounds good to me,more then enough if your ppor was unencumbered,all one would do at that stage of life is cut the investment spread down too a few high end above 7.5%fully franked listed equities with add on 2 way tax split simple, it's only when one get the time to travel around Australia in all the free overnight or permit paid national parks and you talk around the campfire,,i have met quite a few that live off CBA divs alone
have the ppor short term rental and pick up the cheque from the rent each month and the CBA cheque 2 times a year,,simple..
 
$1m in shares split across a couple, paying fully franked 4% yields would result in roughly $57k tax free income indefinitely without drawing down capital.

Seniors get some discounts and concessions just for being seniors - nothing to do with receipt of a pension etc - so that can reduce the cost of living if you like going to shows, taking public transport and the Seniors Menu down at the RSL. Seniors Clubs also have many low cost tours and activities.

One might also expect reduced clothing and commuting expenses.

On the other hand when retired there's 110 hours of every week where one could potentially be spending money, whereas working people are by definition excluded from spending for a fair chunk of this time.
 
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a couple retiring a couple of years before age pension age, wanting an income of say $60K indexed to inflation for their life expectancy will require a balance of roughly $620K in super or other liquid assets.

assuming a 3.8% return after inflation.

the age pension is quite generous and if you retire at age pension age wanting an income of $50K you'd only need about $425K to do it.....
 
I don't think everyone here realises how generous the age pension is....

as a couple you can have $285,000 in assets and still get the full pension of $33,000 pa.

So if you retire at age 65 with $285,000 in super and can generate a 6% return on your investment you will have an income of $33,000 + $17,000 = $50,000 pa without your capital reducing. (although inflation will erode it over time....)
 
I don't think everyone here realises how generous the age pension is....

as a couple you can have $285,000 in assets and still get the full pension of $33,000 pa.

So if you retire at age 65 with $285,000 in super and can generate a 6% return on your investment you will have an income of $33,000 + $17,000 = $50,000 pa without your capital reducing. (although inflation will erode it over time....)

That would assume you don't own your own home. Rent will take a bite out of that.
 
Be careful when planning your old age with the mind of a young person. For most people there's a change in risk acceptance around the time you go into retirement. When previously >6% investment income was the norm, at age 65 you'd be likely looking at 3-5%.

Fixed interest nowadays earn only 2-3%, unencumbered property 3-4%. As for shares most financial planners will advise you to keep 3 years' living expenses in cash so as to get through market slumps without selling your holdings.

So with 1M many people would probably have 150K in cash, a further 200K in fixed interest and only 650K in shares and property. High overall returns are out of the window.
 
Be careful when planning your old age with the mind of a young person. For most people there's a change in risk acceptance around the time you go into retirement. When previously >6% investment income was the norm, at age 65 you'd be likely looking at 3-5%.

Fixed interest nowadays earn only 2-3%, unencumbered property 3-4%. As for shares most financial planners will advise you to keep 3 years' living expenses in cash so as to get through market slumps without selling your holdings.

So with 1M many people would probably have 150K in cash, a further 200K in fixed interest and only 650K in shares and property. High overall returns are out of the window.

Interesting, a fee people I know of retirement age are of the opposite mindset. During working years high capital creating investments are focused on that are often low yielding but in retirement they switch to higher yield investments. Who wants a 3% yield? Waste of capital in retirement imo
 
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