How much do you need / want, before you retire?

Of course it can be done. Being paid for a skill or task there's a 95% chance it can be privatized and contract based.

The real problem is the old paradigm of retiring at pension age which is now 66 or whenever super is enough over 55.
I've been hearing all the reasons why it can't be done it since the 90s.
For me that was always worse case scenario. F.I.RetireEarly imo should be 40.
Yes I know for most people that won't happen, but I can only speak about my experience.
and based on that the goal is financial dependence in a 15-20yrs time frame.
Less with a high income, more with a low income.

As for the numbers, if you're not clearing >50k pa there won't be much independence even though it won't be too bad either as we have medicare.

 

I totally agree with most of your perspective. I just meant that sometimes people really have to find a totally different job if they want more flexibility when semi-retired because they are in a career like nursing were you are not legally allowed to outsource the things you don't like. Having said that, now's the best labour market to be trying things out.

 

I know a few paramedics and nurses working private.
I know some others running private medical businesses.
The former have more work than they can do and the latter have trouble getting qualified people to do the work. Some are event based so work is not continous, which could be perfect for some.

 

Well, after some massive consideration (spanning YEARS and wasting a lot of people's time on this forum ), I think we've made peace with the strategy on how we progress to retirement whilst holding on to most of our wealth for ironclad safety in or retirement years.

Am very confident (notwithstanding massive economic and geopolitical upheavals like WW3 and China nuking Oz) that we will be financially set from 60.

So the question for us was how to survive till then without working.

Decision:

1. work another 3.5 years so both retire by end of 2025. Was previously set at 2030.
2. sell 2 but maybe up to 4 IPs max to get us to 60 and LOP (Live Off Proceeds). Properties to be sold every two years or so when we retire to save on CGT. Will invest proceeds in ASX with a sell shares, get dividends model - basically a direct Super model. We could even opt to sell just one IP with lots of equity but we want to hold on to the best ones
3. at 60, mixture of Super, direct shares and excess rent (not massive due to loans and bloody land tax) will cover living expenses. I expect that income to grow as loans get paid off as ALL our loans are now P&I. I don't expect that we will ever NEED to consume Super. All good problems to have.

Till then, I guess we'll be satisfied travelling as much as we can on school hols (which is all we can do given kids are still in school).

 

Start shuffling loans to remove the security being used from the ones you plan to sell. So you can sell and keep the loans open. Consider selling one first and delay the sale of the second one as long as possible to get some more growth. Unless you think it will go backwards

Carefully consider which to sell first which might be the one with the least amount of cgt or most amount of equity or the one you can manage to unencumber. Or the one that will give the biggest land tax saving.

Try to borrow to pay expenses and even interest on the remaining ones if not working so you can live on rents and increase deductions.

consider whether to debt recycle into further investments too

 

Could even be the PPOR and move into an IP if it's nicer or better location..

 

I am selling down in US, its a common trend here atm. I think US is going to tank in 2026.

Listed one property 2 days ago, multiple offers. This one was purchased for $42,000, looks like I may take cash offer at $320,000 USD . Will stager these due to CG. CGT 15% in US.
All funds will be parked ready to buy shares when they tank.

Will hold all my properties in Oz and my recent development as rents are strong and I expect a growth cycle in Perth

Will be jumping onto share threads for more tips.

 

You did it
Sounds like a good plan
Will you buy a primary residence/move??

 

No will continue to rent. If we get kicked out (the land on which our building sits has been rezoned to 8 storeys from 3), will just move into an IP (4 bed house) we own 1 km away.

The net financial cost of renting vs living in our own PPOR works out to be similar believe it or not.

 

we are moving to Williamstown, Melb in December, renting. Will have to work out the numbers on this, maybe we do the same. Problem is I have 2 dogs

 

Could always buy it as an IP?

 

i need to read @Terry_w threads on this to work out pros and cons

 

As a renvestor myself I suggest people only buy investment properties that they may want to live in themselves. I am sick of moving houses at my old age now. If only I had invested in an area close to the city.

 

Thanks @Terry_w as always

 

100% agree with this.

And no need to chase 10, 15, 20 IPs. 2-4 is enough. Use shares and Super to do the rest.

 

Forgot about this. And doing so will result in more cash in pocket when you sell (bc the loan has been ported to another existing IP) and therefore result is less properties that need to be sold to achieve the goal correct?

 

You will have more cash available because you haven't paid off the loan that relates to the property that was sold. You then gives you options to
a) live off equity
b) loan recycle, re-use it to borrow to buy something else
c) fully offset the loan and keep it ready for later
d) re-use the loan to pay investment expenses freeing up cash to retire on in a tax effective manner.
e) blow the money on something useless and had to go back to work later on.

 

Do they take into account current age?
The reason I ask is we have about $2.5m net worth, not including our debt-free home worth $1.3m and being 60, I am trying to convince my ultra-conservative wife that I can retire. Hoping to get some traction into making her think differently. I have used ficalc and other sites but she just won't see past the 'what if we run out of money' situation. I mentioned that $100,000 is plenty to retire on now and I don't think we will need that sort of income in our 80's.

 

Buy her the book "die with zero"
$2.5mil at 60 is too much possibly.

 

Pape says you only need $640,000 in super as a couple to retire. Not sure how this works. No debt

Most invest in property/shares to retire with more

This is how much you really need in your super to retire