Retire in comfort

How Property Investment Can Help You Retire in Comfort

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Tomorrow’s retirees need a plan to do so comfortably and property investment is one solution.

 According to the Australian Bureau of Statistics, only 10.7 percent of Australians who retired from the labour force will have a total gross weekly household income of $1,500 or more. With the retirement age creeping up, DPN recommends that tomorrow’s retirees need a plan that includes super, supplemented by passive income from other investments.

Increasing the retirement age

The 2014 budget outlined Federal Government plans to lift the retirement age to 70 by 2035. This resulted in discussions that the superannuation preservation age would increase to match. While the current retirement age sits at 66, it will increase by 6 months in mid-2012 and to 67 by mid-2023. The impact of this means there’ll be more time for investments to grow, but less time to spend the results. Therefore, the key is to plan earlier and smarter.

What you need to retire comfortably

The Association of Superannuation Fund Australia’s definition of a comfortable retirement is $43,601 a year for singles or $61,522 for couples aged around 65. However, your expectations are likely to be higher. If you want to earn $80,000 p.a. in retirement, you’ll need to be mortgage-free and have $2,000,000 in investments, based on a 4 percent return. With inflation at 2 percent, in 17 years’ time, this equates to an annual income of $112,000 from a $2,800,000 portfolio.

Plan earlier and smarter

Many Australians rely on accumulation-based savings, whereby it’s unlikely financial goals will be met by retirement. The alternative is to earn money from assets including direct shares, high-interest savings accounts, extra super contributions, term deposits and property investment. Property growth helps you build sustained wealth, especially by structuring the purchase of multiple rental properties into your investment plan.

Related:  Changes to Vacant Land Tax Claims

 

For working examples and further information, see DPN’s article: How property investing can help you retire in comfort.

 


Disclaimer: Chan & Naylor takes no responsibility for the accuracy of any research material of contributors to our newsletter. Contributions to our newsletter such as this article, “How Property Investment Can Help You Retire in Comfort,” are meant to be educational only and Chan & Naylor does not endorse any promotional material promoted in their articles. Readers should do their own research to determine the accuracy of their material.

 
 
 
 

Warning

The material on this website has been prepared for general information purposes only and not as specific advice to any particular person. Any advice contained on this website is General Advice and does not take into account any person’s particular investment objectives, financial situation and particular needs. Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this website are provided for illustrative purposes only.

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