Ideal Passive Income Portfolio for Retirement - advice from forum experts

Discussion in 'Share Investing Strategies, Theories & Education' started by sash, 5th Jan, 2018.

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  1. The Falcon

    The Falcon Well-Known Member

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    Yes. You can invest additional 100k pa post tax (non concessional) in addition to 25k concessional (pre tax - salary sacrifice).

    What do you get ; 15% tax on income, 10% CGT.
    This is as good as it gets in Oz.

    The problem is you have “lock up” until you reach preservation age. Obviously all situations are different, but worth keeping this in mind.
     
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  2. Nodrog

    Nodrog Well-Known Member

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    Interruption, had to put the chickens back in their cage.

    Yes that sort of income is easily achieved with shares given your capital base. Importantly break your retirement up into two parts, before and after Super access. Then plan the strategies around that. Either way Franking Credits are your best friend. Would be silly to pay more tax than needed.

    If your shares allocation increases overtime to be a greater part of your overall portfolio then as others have suggested some International exposure could be considered especially if it helps your SANF. But if you need higher tax effective income now or soon then a high allocation to Australian shares might be more suitable.
     
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  3. L3ha7

    L3ha7 Well-Known Member

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    Thanks @Il Falco for clarifying. I think with my current salary it may not be possible but would love to try that as income increases :)

    Million $ in super and shares be like a dream coming true but long way to go yet
     
  4. skater

    skater Well-Known Member

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    I'm another that is very interested in learning about this. I have NOTHING in Super at all & Hubby is against putting anything in. He's got a whopping $100k (I think) in his Super. I've been reading stuff about shares, but it gets confusing and Hubby is dead set against putting anything into the sharemarket at all....but although I love my property, I'm not comfortable holding onto too much as I get older. I want simplicity.

    We've got another property for sale at the moment & when (if) it settles I'd like to dump the proceeds into the something.

    Unlike Sash, who seems to understand more about this than I do, can the experts please explain in laymans terms the difference between managed funds EFTs & LICs.

    Not looking for advice, just suggestions so that I can make up my own mind eventually.
     
  5. L3ha7

    L3ha7 Well-Known Member

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    Could I please ask the full form of SANF please -I have read it in other posts too but not sure and google is also showing San Fran (US) upon search
     
  6. Nodrog

    Nodrog Well-Known Member

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    Curious about VAP? The correlation with STW may not be there when you need it most as many have found out the hard way at times especially during the GFC. And VAP also has issues with concentration risk. What about DJRE? Still a reasonable yield but far superior diversification and perhaps greater correlation benefits?
    https://www.spdrs.com.au/etf/fund/ref_doc/Factsheet_DJRE.pdf

    I Know that your reasons will be well researched so interested to hear.
    Normally I would potentially agree with International given the correlation between Aussie banks and IPs but the International allocation is only going to represent 4% of his total portfolio. And he wants the higher tax effective income now. So I thought perhaps the focus on ASX for higher tax effective income now then add International later if he decides to increase equity allocation?

    Just clarifying how I came to that decision which may of course be totally unsuitable:confused:.
     
    Last edited: 5th Jan, 2018
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  7. Nodrog

    Nodrog Well-Known Member

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    SANF = Sleep at Night Factor. I have patent pending on it:).
     
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  8. L3ha7

    L3ha7 Well-Known Member

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    @skater -Since I have found out about the CGT the more we grow older and longer we hold the IP's + post retirement benefits/expenses on IP's VS divis from Lic's - my mindset has changed(thanks to @Nodrog and many other members of LIC thread and PC members)

    But I am still confused as the Mantra says keep buying never sell approach but one will eventually come to a stage where Death is concerned -then what will happen to portfolio?

    I do not have trust or smsf so buying direct -will everyhing be automaticaly goes to Mrs and Kids and will CGT occurs on holding shares...
     
  9. L3ha7

    L3ha7 Well-Known Member

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    Hahahahahaha lol that'll do me
     
  10. Nodrog

    Nodrog Well-Known Member

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    Yes many don’t realise the massive tax benefits available through Super. I just assumed some people like paying a lot of unnecessary tax because they get pleasure out of it:).

    I thought Super was a waste of time too when young. But gee when you can get your hands on it what an amazing thing.
     
  11. sash

    sash Well-Known Member

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    Knock ya self out....

    LICs vs ETFs
     
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  12. pwnitat0r

    pwnitat0r Well-Known Member

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    Superannuation is an amazing low tax trust. Anyone who is in their 50s and not taking advantage of it needs their head checked! I know it's probably due to ignorance more than anything, but a few thousand dollars paid to an accountant on how to best structure affairs while taking advantage of superannuation and minimising tax will be money well spent, it will pay for itself and more....

    I'm in the active management camp. Buying an index fund when nearly 40% of the ASX 200 is made up of the banks, BHP and Telstra doesn't appeal much to me.

    I've posted this article before - Fund managers I'd trust to manage my money - Fusion Investing and Analysis

    My money is personally invested in EGP Capital and Castlereagh Equity - they are both private equity firms with value-focused managers who aim to outperform the index by several points each year.

    EGP Capital released their monthly update for December 2017 yesterday. Given the detailed analysis of a company involved in the property space, it might appeal to more readers on this forum

    Update No. 306 – as at COB 31/12/17 - EGP Capital
     
  13. sash

    sash Well-Known Member

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    You and me both....I have been only dumping 35k (employer plus personal tops) for the last 7 tears odd...wish I did that since 30s...I would be nearing $1m plus in Super in stead of the current 500k plus.
     
  14. TreeChange@50

    TreeChange@50 Well-Known Member

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    Plenty of others too I am sure.
     
  15. Nodrog

    Nodrog Well-Known Member

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    Just interpret “never sell” as “sell on your terms” not because of poor planning. We will likely start doing some stupid excessive things
    with our money as time goes by. Who knows.
     
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  16. Nodrog

    Nodrog Well-Known Member

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    But early retirement was a goal also. So we sacraficed some of the Super tax benefits earlier on for that goal. It has meant some CGT gettings assets outside of Super into Super later on. There are strategies for that also. I have no regrets though. Early retirement was important.
     
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  17. The Falcon

    The Falcon Well-Known Member

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    Was waiting for that re A-REIT inclusion. I’ll send you something when i get a moment.
     
  18. Nodrog

    Nodrog Well-Known Member

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    Thought you would have been on top of that. Always ahead of the game:). Slow is my middle name:confused:. I await your email:cool:.
     
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  19. skater

    skater Well-Known Member

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    In my case, though, I haven't been employed for years.....so nothing there. Well, I lie....I think the last statement showed I had something like $16. There WAS a couple of hundred originally.
     
  20. skater

    skater Well-Known Member

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    Thankyou

    After reading that, the most I got out of it is that LIC's are likely to charge more fees. Both of them are a mixed portfolio of stocks, which is good (to me anyway, as I don't want to pick individual shares), and an LIC might have more CGT to pay? Am I right?

    BTW, I know there are already threads about EFTs & LICs, but they got too big & too confusing.:(

    Oh.....and a managed fund is like an LIC except one is listed & the other isn't?
     
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