Super, Retiring Income and Pensions

[RobM]

Drawing down at about 4% would basically ensure the capital would remain intact right up to carking it.

Agreed.
But I'd hate to see another GFC come along and not to have something to fall back on. Chances are we will all need more as the government finds more ways to take it from us to spend on who knows what who.
Also, i don't mind the kids have anything that's left over, if there is any.

Cheers Rob

[RobM]

If only we came with an expiry date.
Would make it much easier.

[KingBilly]

If only we came with an expiry date.
Would make it much easier.

Go away, I don't want to know how long I have left.  Gees, most people would spend their last years worrying themselves into an early grave.

KB

[D4D]

We are both so fortunate to have had long careers in the Commonwealth public service under the old CSS scheme. If anyone here understands how it operates you will understand my grin. 

Yup my missus is on it

[UIZ733]

Yup my missus is on it

You should be ashamed of yourself...................................lucky bugger. 

[RebsWA]

Agreed.
But I'd hate to see another GFC come along and not to have something to fall back on. Chances are we will all need more as the government finds more ways to take it from us to spend on who knows what who.
Also, i don't mind the kids have anything that's left over, if there is any.

Cheers Rob

Rob, if you worry that much you will never quit work!
Anyway, if you run out of money, worry about it then.
Chances are your memory will be shot by then so you won't remember what you have to worry about.
 

[Nomad]

I could invest $1m for a safe return of 80K. You've got heaps go enjoy it.

[RobM]

Rob, if you worry that much you will never quit work!

Yep, you are right. I have been pushing the the date out further for the last couple of years.
My excuse is that a few years ago I took a position on a considerably higher salary than I was on previously. I'm on defined benefit super, and the super payout is based on your average salary for the last 3 years, however the salary figure used each year in the calculations can't increase by more than 20% over 3 years. (or something like that). In short, I have to work until January 2014 to take full advantage of the increase.
Hmmm, that's not far away is it, wonder what my next excuse will be.

Danny, I believe salary sacrificing any money you can is a good  move. Keeping in mind that it is difficult to access prior to retiring. The best thing is that you don't pay tax on the earnings, as opposed to having your own shares, term deposits etc.
You will pay an administration fee based on the balance of your super, and with some funds this can be considerable.

Cheers
RobM

[RebsWA]

Yep, you are right. I have been pushing the the date out further for the last couple of years.

Cheers
RobM

That simply equates to a couple of years of quality retirement you have missed out on.

[Mrs smith]

Yep, you are right. I have been pushing the the date out further for the last couple of years.
My excuse is that a few years ago I took a position on a considerably higher salary than I was on previously. I'm on defined benefit super, and the super payout is based on your average salary for the last 3 years, however the salary figure used each year in the calculations can't increase by more than 20% over 3 years. (or something like that). In short, I have to work until January 2014 to take full advantage of the increase.
Hmmm, that's not far away is it, wonder what my next excuse will be.

Danny, I believe salary sacrificing any money you can is a good  move. Keeping in mind that it is difficult to access prior to retiring. The best thing is that you don't pay tax on the earnings, as opposed to having your own shares, term deposits etc.
You will pay an administration fee based on the balance of your super, and with some funds this can be considerable.

Cheers
RobM

I beleave the government of the day sometime in the future will implement something
similar to this to all super funds. Wait until there's enough self funded and see what happens. lol 

[DannyG]

Theres some great information here so thanks very much, Ill be armed with some ideas when I see the financial adviser that my work place is paying for.

My work recently changed from a defined benefit super fund and put us all into an accumulative fund but they have given us ongoing compensation so all is not lost, this is also why they have very generously offered every employee $600 to go towards finical advice.

As I may have mentioned earlier in the thread we are salary sacrificing quite a bit of cash each week towards super but I am now thinking I may put that cash towards something else and forgo the tax benefits.

We have some very clear plans to achieve before retirement and I am very confident we will achieve them, they are modest compared to a lot of people but they will suit our simple life style

[areyonga]

Several years ago I would have voted Super all the way, but now with super and the economy where it is I would be investing in property as my retirement funding.  Mind you it needs to be closely scrutinized to make sure the correct investments in property are made,

Trevor

[Barry G]

Several years ago I would have votes Super all the way, but now with super and the economy where it is I would be investing in property as my retirement funding.  Mind you it needs to be closely scrutinized to make sure the correct investments in property are made,

Trevor

x2   The 'trick' is to keep emotion out of it.
Investment propertyMUST be based on sound independentprofessional market analysys.  The types and location of the best investment property (i.e. best capital growth) will inevitably be something totally different to what you would like to live in / where you would like to live.
Also, the best locations will have the best chance of surviving any downturn. 
Also, buying 'off the plan' avoids sh!te loads of stamp duty, hence maximising $$$ to you, rather than the state tax man.

Having said that, I am also salary sacrificing.

[Alan Loy]

x2   The 'trick' is to keep emotion out of it.
Investment propertyMUST be based on sound independentprofessional market analysys.  The types and location of the best investment property (i.e. best capital growth) will inevitably be something totally different to what you would like to live in / where you would like to live.
Also, the best locations will have the best chance of surviving any downturn. 
Also, buying 'off the plan' avoids sh!te loads of stamp duty, hence maximising $$$ to you, rather than the state tax man.

Having said that, I am also salary sacrificing.

Buying off the plan is only any good if it is priced right and it goes ahead.  A good mate of mine got badly burnt this way.


remember "if it was easy everyone would be doing it"

[Mrs smith]

Investing in property can be as easy as adding an extra room to your current property.

[JCOJ]

When I was in my late 20's a multi millionaire's advice to me was:

- Aim to pay your house off as soon as you can, preferably by the time you are in your late 40's to 50.
- As soon as you have some equity in your home use it to buy an investment property, preferably at age 35.
- Aim to purchase another investment property every two years after that for the next 8 years (total of 5 properties all up)
- When your mortgage is paid off, then use your mortgage money to put half into super and half into paying off the properties.
- By the time retirement comes all the properties should be close to debt free or at least very much positively geared, you will have salary sacrificed into super from the time your mortgage was paid off (min of 15 yrs) plus your employers super contributions throughout your working life, and all this will all add up to a very comfortable retirement.

[briann532]

I am 37, do you really think the government is going to let me retire. I don't trust super and I only put the minimum amount in. I have put a far bit into bluechip shares and have an investment house, but I still don't see how we are ever going to retire due to basic living going through the roof. Let alone helping the kids out. My plan is to find a block of land where we would like to live, build a big shed, sell up everything, put furniture in the shed and head off around this great country. Hopefully we can travel on the interest earned and build a house when we arrive home. Lets see what happens.

Yeah mate, I'm 39 and feel the same way.
Had a few mates lose a lot in their retirement funds in the GFC. All those years of working and then left with only half what they thought they would have........

I'm more bricks and mortar. I hope to own 2 investment properties when I retire and live off the rental income. Surely I can survive on that.
I have shares, but only safe ones as I'm too scared to takes risks. I pour any excess money into my mortgage to reduce debt.
I've heard all about offsetting and negative / positive gearing etc, but I'm so old fashioned and reckon while the rate is higher to borrow than it is to lend you're betting off getting out of debt asap.
(Just my inexperienced unprofessional opinion I know, but its mine.....)

By the time I retire I'll be crippled in pain and too old to do much anyway............
Thats why I'm living life to the fullest now...

Cheers all, drink up,
Brian

[Homer_Jay]

When I was in my late 20's a multi millionaire's advice to me was:

- Aim to pay your house off as soon as you can, preferably by the time you are in your late 40's to 50.
- As soon as you have some equity in your home use it to buy an investment property, preferably at age 35.
- Aim to purchase another investment property every two years after that for the next 8 years (total of 5 properties all up)
- When your mortgage is paid off, then use your mortgage money to put half into super and half into paying off the properties.
- By the time retirement comes all the properties should be close to debt free or at least very much positively geared, you will have salary sacrificed into super from the time your mortgage was paid off (min of 15 yrs) plus your employers super contributions throughout your working life, and all this will all add up to a very comfortable retirement.

Best post yet!
But need to buy the right properties.

[Rodt]

Several years ago I would have voted Super all the way, but now with super and the economy where it is I would be investing in property as my retirement funding.  Mind you it needs to be closely scrutinized to make sure the correct investments in property are made, Trevor

Or set up a Self Managed Super Fund and do all your property investing through that. It lets you take advantage of the super tax benefits along with letting you decide on the best investment strategy. A good financial planner is the best person to discuss it with.

Rod

[Nomad]

Have to agree with that RodT.

As the cost to set up the warrants for the super have come down dramatically in price and time to create them its is now a very good vehicle to purchase with. I reckon 7 out of 10 sales of mine are now to superfunds.

Its particularly good if you own your own business and want to occupy a property with that business. Pay your self rent, and when it comes time to sell the business you have an automatic investment property.

[chester ver2.0]

Investing in property can be as easy as adding an extra room to your current property.

Utter BS you actually have to sell the property then to make money or it has just cost you money. I personally think property is a mugs game as you have all these people thinking they are millionares but then eat 2 min noodles cause yes they have property but none of it is liquid and the rent is just covering costs

[alnjan]

One thing for sure there does appear to be a lot of different scenarios.  Coming up to that time in life I can see I need to get half smart on what options there are and what is available to me.   

[RobM]

As they say, don't put all your eggs in one basket.
I do know that a large superannuation fund like the one I'm in does a lot better job at investing my money than I would.
Yes I know they take their cut, but worth it in my opinion, based on returns. Mind you having a "growth smoothed" option helped.

Rob

[Beachman]

I know my Uncle & Aunty started buying Investment properties about 30 years ago and they kept bragging how every 2nd year they were buying another property and how they are set for retirement.  We believed they had about 7 or 8 Investment properties.

It wasn’t until they got sick that we got a glimpse of the true cost that these investment properties had on their lifestyle & heath. Turns out my Aunty had to return to full time work and they both needed to get a 2nd job as cleaners working afterhours/weekends all to keep up with loan payments.

Again we don’t know the full picture and we believe all the investment properties were sold, but I do know the extra work and stress took a huge toll on their health in what should be their enjoyable years.

I’m not writing the above to be negative as some people do very very well out of this type of investment. Just think my Uncle/Aunty were before there time as this was all done in the period with high interest rates and no property booms. Just want to show that from the outside it looks like people are doing so well, but behind the scenes it can be a different story.

[rotare]

All good feedback so far.

My strategy is to diversify and have a few different investment options.  We've invested a little bit in property, brought some shares, salary sacrifice into our super every week and like most are paying off our home mortgage as quickly as possible.

I'm still decades away yet from retiring, but to date we've probably broken even on the property investment, lost on the shares, but our super and mortgage are heading in the right directions.  Can't always be a winner on everything I guess.