Apparently you need 2mil worth of IP for a comfortable retirement. Is anyone there yet?

That's a good strategy. Having a taxable defined benefits pension kills the SAPTO for me and puts a large dent in the amount I can have in my super's pension phase because of its x 16 impact on the cap. Fortunately, we can still load up the wife's super to the pension cap, which we do with excess 'gap years' funds, and I can even split my concessional super contributions in her super account's direction and still claim a tax deduction, so it remains a workable strategy for us.

 

Budget.

Yeah, close to being but not quite a four-letter word. It took us a while, and it was many years ago, but once a reasonably large cash buffer was established, doing a budget became a habit. While we were working a portion of our income was allocated for paying bills (50%), allocation for investing (5%), building cash (10%), rest personal spending. Wasn't large amounts initially or flash at all. Percentages changed after time. No credit card. Everything was cash down so you really knew what you had or didn't have available.

Wasn't taught that but both of us had a similar attitude probably as both our sets of parents had little and struggled at times (term blue collar covers their circumstances). Lovely, honest people who deserved and received our respect but we felt we could achieve above that in a financial sense. Gawd, I must cease reminiscing. He he

 

Are you adding to it yourself every pay or just relying on employer contributions?

Keating's original plan was for a 12% annual contribution, staged increases up to 9% from employers (achieved) and a 3% personal contribution (never legislated) to give a reasonable retirement income.
Marg

 

You are definitely not alone there. Many don't have large Super balances. It's not all bad though as it's designed for 40+ yr contributions which tend to increase in later career years & long term compounding starts to help.

Having multiple income streams in retirement is a more robust strategy. Ie. Super, shares, property, business etc.

 

Nice HA

Best property investment we made in 2011, just wish we purchased more

Lets see if AU$ drops to 65 as per predictions

 

Buzzards, I just keep cracking the whip, dont know if it works but I also keep raising the rents

 

What do you do when you are working? What is your approximate split between capital and inner city vs other regions where you buy for cashflow? Do you have a strategy for when to buy for cashflow vs when to target CG?

Amazing life style btw! Well done

 

I work in health but have set myself a limit to just work the first five months of the FY and see how that goes. The strategy I follow is to buy in towns/cities with a pop of 100k or more and yield 8% gross or better. I only have two ips in Aus capitals (one in Melb and one in Perth). I buy in Aus when finance allows but don't buy here for cash flow. I don't think it makes sense after stamps and with land tax. So if I buy here I' m usually looking for a rising market and preferably the option to do something in addition to create more cash flow and/or equity.

 

Great thread.
I see there’s this ongoing debate about what ‘retirement’ is.
It’s quite amusing actually!

My take on it is:
To finally be financially in complete control of your day to day life without being obligated to go to a job or work to maintain a lifestyle.

I think I speak for most here that ‘retirement’ is about being ‘financially free’.

I have many things I will like to do once I’m not longer required to work to maintain my current lifestyle, financially.

 

I you then added the average costs for kitchen/bathroom/guttering/replacing car outright twice in retirement eg non spent but still accumulated expenses, probably closer to $80k pa.

But yes its good you are keeping good records and you do seem to be below the average.

Personally for my wife and I we are budgeting $100k pa each in todays dollars (though will be a lot higher when we retire in 11 years from now).

 

As a retiree it never ceases to surprise us how many unexpected expenses continue to arise relating to personal, home and car maintenance etc. The latest being large dental expenses for both of us which private health insurance only covered in part. Skin cancer surgery. Add to that having to pay for multiple flights to care for I’ll MIL, weddings and funerals. Ride on mower needed major repairs albeit being relatively new but out of warranty. Waste water treatment system pump needed replacing. Tree blown over in storm and cost $1,200 to get cut up and removed. Oven needed expensive repairs as it is just out of warranty period. Vacuum cleaner **** itself. And don’t get me started on fitted led and instant fluro lights. What used to be a simple light bulb replacement now requires a bloody electrician. Pool cleaner needed replacing. Roof and plumbing (pipe behind wall split) repairs. Pet expenses including Vet visits. Which reminds me, many retires way underestimate the cost of keeping pets in retirement. We need to replace our car next year.

All this in less than the last six months.

As for my neighbours the dog ran behind the car when backing out resulting in a broken leg. $4,500 Vet bill!

I agree with @Dean Collins, if possible aim for $80k plus.

 

And new tyres for the Kluger at $1k plus Honda brush cutter service and replacement parts. I’m sure there are numerous other expenses I missed. Plus craft beer isn’t cheap.

 

For those interested here’s an article discussing the Forth Pot I posted earlier as an addition to the Three Pot Strategy. Insurance Bonds are another option also in keeping tax to a minimum.

A fourth pot for your retirement plan | Bruce Brammall Financial

 

+1

And keeping the wine cellar AND the wine fridge fully stocked with really nice wines is costing me more since we retired (albeit due to going up a level or two in quality).

 

He he yes.

Spent a decent amount on wine yesterday at Dan Murphy actually. Another “mandatory” expense that I forgot to mention.

I try not to think of the rediculous amount we spent on wine when holidaying in Stanthorpe region awhile back.

Life’s much too short to be drinking cheap beer and wine. Probably even shorter if you drink too much if it.

Couldn’t resist this craft beer pack yesterday along with a few others:
Bridge Road Brewers & Friends Craft Beer Christmas Countdown

 

No, my 10 year major item budget already includes all these types of purchases for $25K pa average, which totals $60K pa with my $35K pa normal living expenses. If anything, I've probably been a bit pessimistic with what major house maintenance ($20K) and renos ($40K) will cost me over 10 years on a relatively new house, especially since I will DIY some of it. And cars, as mentioned earlier, we just upgraded two cars to brand new ones last year without breaking our $60K pa average. It really can be done.

 

I should also add that my retirement income is actually much greater than $60K pa, but it just turns out that $60K pa is enough to do everything I want the way I like to live my life. Sure, I could afford to hire a team of professionals every time a weed pops up, a wall needs painting or I feel like eating sandwich, but that's not what I do. I like to keep my skills up, so I'll have a go at anything that I can find a Youtube clip of some average Joe doing the job

 

I'm lazy (and useless). Hence need $100K pa passive.

 

LOL. Now I’m starting to see why I need so much retirement income.

 

We are currently guttering a bathroom, can be done for $15K, dependent on size of course.