Most Australians recognise the need to set aside funds for retirement. But it’s an issue many of us only address when we’re approaching retirement, and by then it can be challenging to build the level of investments needed for your preferred style of living.
So what sort of asset backing will you need to have to support your lifestyle when you retire? We’ve created a case study below to shed some light…
Let’s assume you could manage on $150,000 per year. If we look at rental income from property as an example you’d have to work on developing a portfolio of $10,543,748.
$5,965,971 would be sold off to pay down debt (allowing for costs and CGT) leaving you with a debt-free asset base of $4,577,777. Assuming a 4.8% average return this would give you $219,733 in income.
Allowing 30% of expenses ($65,919) this will leave you with $153,814 taxable income. Split between you and a partner you’d each have $76,907pa to live out your retirement.
The thing I like about rental income is that if you have bought property in the right area, rental income is linked to inflation. As the cost of living goes up, so does your income in line with it.
Of course, there are many ways to fund your retirement and this is just one way, so if you’d like to chat with us about options to grow your wealth, give us a call on 1300 003 003 or contact us and we’ll work with you along the way to help you achieve your goals. We’ll even shout you a cocktail to round out the day that you retire your job!