Endgame - What are you aiming to live off?

Not taking the **** at all. I wouldn't do that to a lady.

Quite a few on PC view having a PPOR whilst receiving the Pension (let alone extra assets on top of that), as "draining" the Government coffers of taxpayers hard earned. Limiting your assets so as to still receive the Full Pension is like tipping petrol on the fire.

I personally say go for it love!

 

Well tough titties for whoever doesn't like it!

I've worked hard for over 50 years here in Australia and paid all my taxes and the aged pension is my paltry reward for also serving my country during my working years. So it's alright for people to wrought the system and pay minimal taxes while increasing their wealth while at working age but loe betide anyone trying to maximise the pension that I am entitled to by legal and recommended means!

I was reading another thread here where someone posted about bringing their parents here from the old country and how to get tax benefits and super etc. No one dumped on him and he was given heaps of helpful information! To me that is wrong! Yet I get dumped on for wanting to make my pension go further and leave something for my nieces and nephews! pfft!

 

All good @shimmy. I've enjoyed your posts these last few days. Wow, to have worked over 50 years and to now start being active as a property investor.... better late than never and my hat is off to you.

 

I've got some bad news for you I am afraid - CGT is still payable once retired. The main difference is people generally have lower incomes in retirement which may lead to less CGT being payable.

But you are right - the rules will probably change.

 

I agree. I'll slowly sell off properties and move into reliable shares. Much less hassle

 

Combination plus shares.
But, I class selling down to pay out Loans in order to LOR as a varied form of LOE anyway.

 

There's just too much leakage liquidating multiple IPs. At least 1/3 of the equity on paper will go to selling agents, the ATO etc.

Not to mention that in general, and TerryW will probably correct me, you have to live on after tax income. Neither LOR nor LOD (living off dividends) is a 100% foolproof strategy.

Hence I'm going to be a lone voice here espousing an LOE path (for myself). The way/point at which I'll hit the retirement trigger is when:

- my properties are self sustaining ie rent covers interest, land tax, rates, expenses, repairs etc.
- I have $1.5-$2m sitting in offset accounts
- I have zero mortgage on my PPOR

My super balance in the scheme of things is immaterial. I'm not factoring it as part of my plans - no point as I can't touch it till 65??

The intention is to get this all done within the next 5 yrs....am commencing this process as we speak. It will be very challenging as there are a lot of prerequisites. My projected LVR in 5 years will be circa 65% or so including the funds in the offset.

 

Also have a look at some of the ideas that I had for living off 'equity'
5 Living Off Equity Strategies to Speed up Retirement 5 Living Off Equity Strategies to Speed up Retirement

 

Thanks Terry, already printed off and laminated on the wall

 

I will be 100% shares in old age, no properties except the one I live in.
Returns are too low, too much hassle, costs and tax.

 

End game is to live off fully franked dividends via a family trust, but maybe also holding onto a couple of properties for growth & diversification.

 

I am 30 and this is pretty much me to a T. Always ask for money from the bank when you don't need it and I find it funny how they don't consider you can pack up and retire next year leaving me with no income but hopefully 5M in potential debt =D

 

Who knows, Will, policy could change at any moment, but yes, for me too I like to go for money from banks whilst it is still on offer!

Making money by using a little bit of my own (but mostly other people's) money.

 

Agree I don't pay a lot of attention to the current policies as they most likely will change, i just hope that whatever they change it is grandfathered. I still think things will be very different in 30 years.

Things like NG may not be around in the future, death/inheritance tax may become something that i will need to plan about for my children.

 

We do all of the above while continuing to create additional income/cashflow via property developing.

Money in, money out, the idea is to never really stop growing/building wealth.

 

The end game is to live off cash. No properties, no investments whatsoever (isn't worth the effort). Only some bank deposits and nothing more.

 

does this mean you are tenant bagging, biting the hand that feeds you

 

of course it is working the system. whether or not that is appropriate or fair or whatever is ultimately personal opinion and could be debated for hours but at least call it what it is.

basing your current and future investment strategy around how you can maximize your welfare cheque and not how you can maximise your investment is as textbook an example of working the system as I can think of.

ultimately money is a finite source and it means those who really do need, not want like your situation, often are underfunded.

"According to the 2015–16 budget papers, the Australian Government will spend an estimated $154.0 billion on social security and welfare in the 2015–16 financial year.[5] This represents 35.4 per cent of total government spending."

pension represents about $60bn of that, so of every cent raised to run the entire country, 15 cents goes to the pension. that figure would be a fair bit lower I suspect if people focused on their finances instead of how much the can take in handouts.

but yeah just keep at it, why not, everyone else does it etc blah blah

 

You realise that while you worked you also received benefits in to return for the taxes you paid dint you?

honestly the simple fact is that leaving something for your nieces and nephews is great but why should the taxpayer pay for that? how is it any different to someone sitting at home and collecting the dOle instead of getting a job?

 

Dear Sanj... I understand where you're coming from, but did you really have to start attacking?
I'd rather @shimmy not be scared away

And shall I say, I think tax payers and governments support investors. But investors support tenants. Tenants support the government with their taxes... money goes round in circles....

I feel anybody capable of buying IPs while on a pension deserves respect. Because what I hear is the pension isn't much to live on at all...