Retirement Incomes....will you be in the top 3%!

Property is not the only form of investment. If it is not working, mix it up. Property is treated very favourably tax wise, so is good as a capital growth vehicle while working, but when moving into retirement, it might be worth selling the properties - over multiple financial years, and when income is low (eg, quit work pre-retirement age, minimise CGT) move funds into a fully franked LIC or similar. That would give similar or greater income, but without the costs of property.

Cheers,
Inertia.

 

Absolutely agree...I am in the process of doing that now....

 

Surely that is $67,000 per retiree or else it would say it is a couple?
That is a fair assessment as top 3%.

I will take a stab where I will fall into. Right in the average.

 

For someone starting out would it not be beneficial to just go the LIC or similar road for the start or is the capital gain for property the carrot? Does the capital gains tax aspect take the shine of the property for cg then sell for lic route?

 

My path has been B+H NG property in trusts using OPM for tax-free growth (never sell so no CGT) and shares/LICs/managed funds in SMSF for tax-free income (in pension phase).

I don’t like paying more tax than I have too, prefer zero tax.

 

Sash you causing troubles again

 

Thats is the de way wee roll.....BBS style.....

 

For those many of you who have worked very hard to ensure independence at retirement - walk on by - nothing to see here.

For the more improvident among us, a little worried about it all, this is a great read:

Don't Panic: More Reasons You Don't Need $1 Million to Retire Well by Nick Bruining | Boffins Books

 

Yes that is correct....couples can earn about $304 per fortnight from all income sources without affecting their pension. That is about 8k per year.

 

Not sure how this works, but just found this

So a strategy for those who cannot retire on higher income, this may be the sweet spot???

https://www.williambuck.com/how-much-super-will-i-need-to-retire/

 

Agree with the concept but if rules change, like the removal of franking credits (already was considered), would that still be an attractive option what you suggested?
I don't know, I am just thinking out load? Rules and regulations are not constant and keep changing without us having any control over them, hence only we can change so I agree. BUT....should we really diversify to any given asset class as rules change or should we hold the diversified portfolio? What do you think?

 

I like your strategy!
I think what many forget is the difference of compounding growth over income. Income must be taxed each year, whereas growth in equity, year on year is not taxed (if you never sell).

 

I think we adapt to the change
In the case of the removal of franking credits, it may mean restructuring in a more significant way. People invested before our current franking credit system was introduced, and they will invest after its gone.

If franking credits are removed, I wouldn't be surprised if companies changed their dividend distribution strategy a bit too. Evaluate the whole environment, and adapt as needed.

Cheers,
Inertia.

 

I think my thinking from young age was "What if there is no age pension?", hence wanting to be self-reliant.
What I don't understand is why such mentality is not introduced and celebrated, why scarcity or entitlement factor is mainly portrayed rather than prosperity to be attained, especially if we get older?
We all have a window of opportunity, let's say a working life of 40-50 years (between say 20-25 yeas old to 60-65) to accumulate, hence of course disparity between the young and what the old own and have will always exist...many young forget they too may grow old over time!
You see, if I am able to generate more or abundance and not be a burden on the pension system, why I have to be forced to confiscate to enable others? I wish to have the personal choice whom to give rather than be forced to give, especially if the manager doesn't manage the fiances well.
To me financial prosperity is being able to live as retiree the lifestyle I was accustomed to during my earning stage if not more, especially if I took risks and sacrificed many aspects of my life to create such abundance. As my mentor JR said:

There are those who will laugh at those who read useful
books, and yet there is little difference between those who cannot
read and those who will not read—the result of both is ignorance.
There are those who will discourage those in search of a better
occupation, and yet it is essential that each of us find what we were
“meant to do” if true happiness is to be found.
There are those who will frown upon those who set ambitious
goals, and yet without goals there can be no achievement, and
without achievement life will be as it has been.
There are those who will gossip about those who are doing
well, and yet there can be no cause for rejoicing among those who
are doing poorly.
There are those who will cry to those who turn away in search
of a better life, and yet we must sometimes turn away from those
whose effect limits us—in spite of the tears.
There are those who will hate those who achieve the improved
life, and yet there can be little happiness in poverty, nor love among
those who must endure it.
and this one paragraphs sums it all:
A major challenge in life is for each person to learn the art of standing guard at the doorway of their mind. Carefully examine the credentials and authority of those
seeking to enter within that place where your attitudes are formed.

 

Maybe or maybe not. It cost the company zilch to attatch the franking credit to a dividend. It still pays the corporate tax rate no matter what. Hope they don't get the bright idea to increase the payout ratio to make up any perceived "shortfall." In any events it is Treasury's long term objective to reduce the corporate tax rate to at least 25% - a search for history of corporate tax rates in Australia should come up with Treasury's proposal.

As to the title of this thread I don't consider the comparisons make much anyway. Individuals will end up with what they have whether it be in the top 3%, 10% or middle 50%. My metric is simple. Multiples of married age pension rate means I'm good and that is all that matters - to me at least.

 

I agree with this 100% as you pointed out, just it may be in a more significant way.
Entering and re-entering property market or property asset class is a not as attractive or costly exercise long term in comparisons to other asset classes hence it may be more profitable or worthwhile to leave some assets there. That's just my opinion, to protect against say such changes and challenges.

 

To clear up the ambiguous numbers being thrown around, there are currently 3.1M retired Australians.

• 63% of them have a household income below $50k.
• 20% $50k - $80k
• 11% $80k- $130k
• 4% $130k - $250k
• 1% $250k+

Source: nationally representative syndicated research as at Jul 2019.

 

Do you have the source? That seems a bit high....that seems to represent the wage earners not retirees....