- Retirement is 20 years (65-85) - After tax return of 4% per annum, and - You do not wish to leave anything for the children
Then $1m in today's dollars allows you to draw $6,059.81 per month (in today's dollars)
Assuming 25 year retirement it allows you to draw $5,278.
Also in the current environment, as your assets reduce from the drawn downs, you may be able to supplement your income with a part pension. I doubt that will be available in the future.
Not sure if that is enough, especially in Sydney. I guess it would help if you owned your own house.
Sure, not everyone can acquire that much, but I'm simply asking if it's enough to live a comfortable middle of the road lifestyle in Aus today if you do and never have to worry about working again.
Yeah you could Depends on lifestyle choice. My comfortable middle of the road is worlds apart from a mates comfortable middle of the road....................but he will be working until he's 180 before he gets there debt free.
Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
Assume you're looking at a cash drawdown rate there for an all cash portfolio?
No. Remember when you retire, you are still a long term investor. That means you can withstand volatility. So a portfolio of assets spread across equity (domestic and international), long bonds, REITs and cash. Possibly some alternatives like infrastructure and hedge funds. Dividends in this portfolio with some asset sales would fund the monthly draw-downs.
As your assets start to decline (after 10 years or so) you can not tolerate the same vol. So you would progressively move to shorter bonds and cash (but still have some equity exposure).
Quote:
Guessing that would fluctuate markedly with different yields and capital growth profiles on assets?
Yes. But what is never really appreciated is on day 1 of your retirement you are still a long term investor (i.e. 20 year retirement = average 10 year investment timeframe). That is longer than most people who aren't retired.
So you can withstand the volatility. You have time to earn back the short term losses.
Yeah you could Depends on lifestyle choice. My comfortable middle of the road is worlds apart from a mates comfortable middle of the road....................but he will be working until he's 180 before he gets there debt free.
Cheers.
I guess my comfortable middle of the road idea of lifestyle is not particularly extravagant, close enough to main cities to do a bit of culture every now and again so within a 3 hour drive or so of Sydney or Melbourne, small 3 bed house in a decent part of a smaller and less expensive town, holidays/trips are now mostly motorbike/4WD touring and camping and can't see that changing, social is usually BBQ and beers with mates already and that would only increase with better weather, the odd concert or show but only a few times a year. Go out to dinner a couple nights a week maybe but frankly I'm tired of high end restaurants and 5* hotels having spent most of my working life in Europe and the Middle East. I prefer small places with character now.... And they're usually cheap. I already have all the stuff I'm ever likely to need.
Never thought I'd say this but I'm actually bored of spending money. Much prefer the simple life these days hence (very) early retirement now looks within relatively easy reach, particularly now that UK property has recovered so much, and the FX rate is swinging in my favour as the Aussie dollar regains it's rightful place as a banana-republic currency.
b_b
21 Aug 2015, 10:13 AM
No. Remember when you retire, you are still a long term investor. That means you can withstand volatility. So a portfolio of assets spread across equity (domestic and international), long bonds, REITs and cash. Possibly some alternatives like infrastructure and hedge funds. Dividends in this portfolio with some asset sales would fund the monthly draw-downs.
As your assets start to decline (after 10 years or so) you can not tolerate the same vol. So you would progressively move to shorter bonds and cash (but still have some equity exposure).
Yes. But what is never really appreciated is on day 1 of your retirement you are still a long term investor (i.e. 20 year retirement = average 10 year investment timeframe). That is longer than most people who aren't retired.
So you can withstand the volatility. You have time to earn back the short term losses.
Current portfolio is about 60% property delivering a net yield of 8% on current value, 30% equities in a pension wrapper, and 10% cash and other.
Hadn't thought about changing the mix of current assets, other than moving the equities from growth funds to dividends funds closer to retirement, but had thought it's probably worthwhile to build additional cash reserves and equity/bond holdings to rebalance a bit over the next few years.
Retirement means a lot of different things to different people.
The best book on retirement I have read is "Retire Young, Retire Rich" by Robert Kiyosaki
It has nothing to do with retiring young or retiring rich.
It defines retirement as moving to a position where you don't have to do anything that you do not want to do for money.
I retired at 45, Im now 55, I only go to work when I feel like it and only do what I want. My income is not dependant on my attending work and I could take the year off without it affecting my business or income.
My income streams define my retirement, but in truth I am still bound by my new partner who is 11 years my junior and doesn't want to retire from work until her youngest finishes his HSC. (2016)
So again define retirement, my dad retired from farming at 74 to become a commercial fisherman till the age of 80. So did he retire at 74 or at 80.
You cant drive a house, BUT you can always sleep in a car!
Retirement means a lot of different things to different people.
The best book on retirement I have read is "Retire Young, Retire Rich" by Robert Kiyosaki
It has nothing to do with retiring young or retiring rich.
It defines retirement as moving to a position where you don't have to do anything that you do not want to do for money.
I retired at 45, Im now 55, I only go to work when I feel like it and only do what I want. My income is not dependant on my attending work and I could take the year off without it affecting my business or income.
My income streams define my retirement, but in truth I am still bound by my new partner who is 11 years my junior and doesn't want to retire from work until her youngest finishes his HSC. (2016)
So again define retirement, my dad retired from farming at 74 to become a commercial fisherman till the age of 80. So did he retire at 74 or at 80.
Good answer.
I've been doing excessively long weeks for the last couple of decades working my way up the ladder within big companies, rarely take enough holidays, work weekends and nights as required, don't dislike what I do but getting close to the point where I want to do absolutely nothing for a year or two.
Might get bored after that and work again. Might not.
But it'd be very nice to know I don't have to if I don't want to...
We've asked ourselves this question before and our answer was $3 mil in Australia and as low as $1 mil if we retire in a country with lower cost of living (similar to Frank in Vietnam) Note this assumes net wealth ie. no paid off home on top of those figures.
I agree with car tart ... its about financial indepenence ... working only when I feel like it or want a more lavish life style.
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