Retire at 60

To generate $52k pa from rent you will need approx $1.3mil in paid off property returning 5% yield allowing 1% for expenses. Todays dollars


So if all you did was keep paying the current priperty you would be there.

But you could greatly speed things up. See my thread called 5 living off equity strategies tobspeed up retirement.

 

Invest some additional time reading up on this forum and you should be retiring in your 40's. Look at the the strategies and tax threads from the guy above: @Terry_w it will open your eyes up to what is possible. I also agree you need to be active with your investments like you said you were in the past to speed up the process. There's a good chunk of equity sitting in your PPOR, use it to expand your portfolio.

 

There are a few guys I've met / sort of got some mentoring from over the years (disclaimer: not that many years... I'm still under 30) that are very much in this situation, very solid ($300kpa+ )incomes. no gambling habits, no debts, obviously plenty of wealth, yet the keep working. It looks to me like they just enjoy the prestige & lifestyle. They are at stages of their career where they aren't really directly producing (grinding) out work, they are managing others. Lots of conferences in fun destinations, a few grand a month worth of restaurant & bar expenses, etc. All in all, pretty great lifestyles that may be beyond their ability to replicate without the job paying for all the booze, dining, hotels, travel, etc. I also think a large part of it is that they are people who mostly spent their 20's, 30's & 40's doing long days grinding to get where they are. Their social circle is their professional network & a lot of them don't seem to have much outside of work, because its been their primary focus for so long. They get to a point where sure, they don't need the money to live anymore, but by giving up the work they are giving up so much more than that. I've noticed similar trends in law and medicine so I don't think its just in business, people who are arguably past their prime but still stick around in a reduced capacity because it keeps them in the game and active in their social circles.

 

Keep going on the path you're on and you'll get there easy on the "set and forget" strategy you're on. Be a little bit more pro active in your investments as others have said and you can "retire" in your 40's. If you want to work until 60 you will be quite well off if you take a bigger bite of investment now whilst young. Positive geared property is covering itself now. With a decent buffer your fear of unemployment is moot. There are other jobs out there.

 

Thanks you for your advice.
I will definitely be looking at investing more once the wife income increase a bit more.

 

I don't agree with this.
32.. not 52. Why do they need to pursue more "active means".. I call BS on that... then talk about shares etc.. seems like a very generic slapstick response..

My thoughts:

As wife is on lower income, question comes to my mind is: what structure is the property owner under? Trust would have assisted in this case.

My other questions are;
1. With 70k-90k combined household income, who advised or what was the strategy in buying just one property @ $1m...
2. Where is the property? If it's generating the net cash flow you say I hope it's not on a mining town.
3. Why not buy 3 x $400k properties and leverage off them to pay themselves down.
4. A lot of eggs in on basket letting 1 $1mil property be the security for your retirement.
4. Why pay principle off the investment? Why not contribute the equivalent into an offset, same result, more liquid financial position.
5. Not concerned about a spouses super, as long as alternative strategies at play.
6. Who's name(s) is the PPR in?

 

Exactly.
Buying again and being exposed to a larger asset base to work for you over the X years compounding until retirement is the key.

Maybe you need to get the $1m property to a more sensible LVR, but at that point I would be going again.. and again..

 

You're kidding. We have been retired for 6 years and we spend between 40 and 60 each year on our annual overseas holiday. What would we do for food for the rest of the year .

We didn't work hard for 35 years just to retire to a basic or modest lifestyle.

 

Age, not income.

 

Are you sure? @ellejay was talking about 40k in the previous paragraph.

Having a retirement age range of 40 to 60 years is very broad.

I am happy to be corrected.

 

Each to their own, everyone has different needs, want and existing assets. Sounds like you're having an amazing time of it P.S I wouldn't want to do 40k either, not long term but I know people who do and seem comfortable.

 

If you have not already, I think you should read Rich Dad Poor Dad. Very interesting read about the basic principles of creating assets and passive income streams to assist retirement.
Definate game changer.

 

Yes the original discussion was about age as that is the thread topic... I originally suggested an extended transition to retirement at 45 rather than a hard retirement at 60 as this is what I have done (at 42 actually).

The talk about 40k-60k income is related to the 1M versus 1.5M sub-discussion not the comment you quoted. It doesn't really matter... everyone is in broad agreement that a hard retirement at 60 is aiming too low, as is a 40k income for most people.

I don't think a traditional hard retirement will be the norm moving forward. I believe a lot more people will start extended transition-to-retirement (TTR) & work part-time or in more preferred roles as their financial independence matures. Financially, I never need a full-time job again in my lifetime... so why not break from normal & enjoy an 18+yr TTR? Once a passive income somewhere in the 40k-60k range is achieved, you don't really need to work. It progressively becomes a choice....

Enjoy the journey

Indi

 

That's where I'm at, don't need to work and don't feel inclined to carry on working a permanent gig to make more money so that I can do luxury holidays back to back and drive a flash car in 20 years time.

If I'm still here in 20 yrs though I should have enough to do all that anyway based on average growth and tenants paying down debt. That's based on $4-5m in assets that will be sold down over time.

 

The aim is not to sell down
You will find (Surprisingly) the debt repayment, and rent increases will result in net profit leaping ahead in leaps and bounds.
Before you know it $1m passive income will appear

 

That's OK.

One can always donate $960,000 to charity every year so one can maintain their modest $40k lifestyle .

 

No. Net Worth gives you financial flexibility. Someone with $1.5M has more financial flexibility than someone with $1M. The longer one maintains their Net Worth, the longer one maintains their flexibility.

In my books, one can never have too much flexibility. If one has too much, the problem is easily solved - make a big donation to charity, go to a casino and place a big sum on red, ...

If one doesn't have enough flexibility, it is a lot harder to get it - get a job, cut expenses, take risks (i.e. invest), ...

 

You're likely to double your problem (of too much money)

 

Keep doubling up until the problem is solved .

 

Working into your 60s isn't my idea of outstanding flexibility. For me, having to get a job to top up income isn't the end of the world either if I get to finish full time, permanent work 15-20 yrs earlier. This is more like my idea of flexibility. Most wealthy retirees I know end up returning to either voluntary or paid work anyway. You've done very well, congrats