Proportion of your wealth in retirement

Hi

I am curious as one gets closer to the end goal of retirement, what is your ideal percentage split of your assets into:

a) Your own PPOR
b) Investment property net equity
c) Others (industry super, shares, everything else)

Have you thought deliberately about that? Or if you have retired, care to share? do you think yours is topsy turvy...if so why or why not?

 

Every day I get closer to retirement...

I'm currently accumulating assets in real estate but by the time I retire I'll have hopefully sold them all down, and reinvested in dividend stocks. I'll keep the PPOR, and if I have some high performing (yield) IPs I'll keep them, but ultimately won't want the hassle of property.

Whatever I have in super, I have in super. I won't be able to touch it for at least another 23 years anyway.

 

Haven't really planned or thought about the percentages, but our PPOR will be about 35%, net equity in properties about 62% and 3% for Super.
This will probably change over time as we continue to accumulate while being "retired".

We could jack up our passive income an extra 100-200k if we downgrade the PPOR a little, but don't see the need to.
Probably want to upgrade rather than downgrade.

 

The percentage of your main residence as an overall is not really relevant in terms of understanding an investment profile.

It could be a low % because you live in a country dog box or a low perecentage because you are really wealthy.

Our personal family charter calls for 7 years of retirement income in cash. And that is really just to protect against the world exploding.

 

The PPOR split is something we've deliberately planned <15% of net.

The split thereafter is planned to morph towards a far heavier #3 as we continue to restructure our finances to be more liquid & simpler to manage.

Deliberately minimising our PPOR value as a % of networth has allowed us to downshift to PT work in our early 40s & be in a position to not work if necessary. TBH, it's one of the best financial & lifestyle decisions I've made in my life.

Enjoy the journey

Indi

 

Well done..let me tell you a story..know this couple...1.4 million PPOR; 800K super in early 60s...zilch nothing else.

Calculate their percentage..they are sweating now...strata fees 10K a year.

 

Yep, see it all the time.... utterly ridiculous life choice IMHO.

We could be living in a ridiculously exspensive PPOR if I was prepared to hold down a full time job for the next 15-20 yrs to pay for it (& the interest).... but I'm not.

We've got friends living in PPOR's 3 times the value of ours (with large mortgages) who claim that "we are lucky"..... No. No we are not. We're just not prepared to be debt slaves & work ourselves silly, just to have a trophy house & little time to enjoy it.

For example I spent the day riding my Enduro trailbike through the state forest.... rather than having to work to pay my banker.

 

Exactly! See that's the thing, my passive net income is a fair bit more than that after I pay tax on my income (far from seniors tax breaks here ) & I don't have big rates bill or strata fees..... so my $'s go a long way.

If however, I lived in a 1.4M PPOR, I'd be back in the rat race for a loooong time.

 

What?? No bikes allowed in SA forests

 

VIC... we have a recreational rego scheme

It also helps when you own acerage bordered by state forest

 

I'm hoping PPOR paid off, 10% property, 10% super and 80% shares. Now back to the real world. PPOR paid off and 100% super which will be pretty good, just have to wait until 60 to get it.

 

@Indifference - a $1.4m ppor!!! We can tell that you don't come from Sydney.

 

Living in the other 7.5 million square km that is this great country, allows the rest of us to not need a 1.4M PPOR & for many of us, not even a full time job.... we each need to live with the choices we make. For those that choose Sydney.... good luck to you!

 

Guess a lot depends on where you start from and how long you have to accumulate.

It was only 2 yrs ago that a colleague retired, and I knew he wasn't much older than me. The realisation I had left it too late to think about retirement hit me like a thunderbolt!!! I would like to retire within 10 years, which would make me 62...4 years older than Mike's retirement age.

So I figure PPoR will be around 50% with 20% IP and 30% super....unless the IP portfolio builds faster

Fortunately having only just moved to middle ring from way outer (60km from cbd) we could comfortably sell PPoR and move to outer burbs for retirement thereby adding more cash to the equation.

 

IMHO i think 50% in PPOR is still too high....lazy equity....but to each his own

 

PPOR debt free by then
after helping kids with their properties and paid for their degree whatever they want to study

a few mil left in shares holding and I probably can't use all the dividend so be reinvesting and I can comfortably grow my portfolio average around 8% a year in all cycle in retirement

Currently, I do around average 15% compounding return a year for a while now.

When we done kids inherit the portfolio by then hopefully I can teach them a few things about the stock market to keep growing and access passive dividend stream for life

 

Interesting question Virgo. I just turned 50. Hope to be semi-retired within two years.
My ratios will seem absolutely wacky to most, but skewed to my personal philosophy and circumstances. So in two years time it will hopefully be something like :

a) PPOR 20%. Country dogbox (with trimmings),will be debt free.
b) Investment property equity 77% (mostly in 3 CIPs, plus 3 resi) – main retirement income stream
c) Other 3%. Have mostly been self-employed and permanently cash-strapped – so have reinvested in businesses where possible rather than super over the years. I’d like to get the shares up to say 15% over time, but that will be a work in progress when I get more time to monitor them, as I am a control freak and don’t do passive well (Need to fix that).

Also hope to then work 20 hrs pw for the next 10 years for pin money, during which time I fully expect to breed a Caulfield Guineas winner lol, plus do volunteer work.
My stuff is definately topsy-turvy, but I’ve always gone the road less travelled. Everyone is different.

 

I would suggest looking at what income you want at retirement and then working backwards from there in terms of asset allocation.