Australia: How much do I need to retire at 60? | MYOB Blog

Liam Shorte writes:

A common rule of thumb is that if you want to retire at 60, you will need about 15 times the amount you have calculated for your annual after-tax retirement expenses. So if you estimate $60,000 per year then you will need $900,000…..According to the latest data for September 2012, in general, a couple looking to achieve a comfortable retirement needs to spend $56,236 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $32,511 a year….. The figures in each case assume that the retiree(s) own their own home and relate to expenditure by the household.

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6 Replies to “Australia: How much do I need to retire at 60? | MYOB Blog”

  1. Your estimate of $60,000 ater tax retirement expenses is equal a 6.60% yield. To achieve this level of return will require you to invest in high yielding fully franked Australian equities and assumes the tax payer is in pension phase ( not accumulation phase) and thus receives dividend income tax free. If one invests in residential real estate the yields are much lower ( circa 4.00%) and will require a capital value $1,500,000 at a ratio 25 times your desired $60,000 ater tax living expenses. By way of comparison, commercial real estate can yield closer to 9.00% and require a much lower ratio.

  2. The pension pays $30,000 you can have 400,000 in cash- any more than this spend upgrading your house to water front and with your 30,000 gov money for couple and near 10% after tax refund from telstra this should give you 70,000 to spend each year- proplem solved retire now no rent water front living and live of the gov and go crusing and travel aust -well properly travel else where until you need the near free helth care cover everyone else does and they complian -what a bludge get it while its hot.

  3. For those whose pension capital is below $600,000, the Australian government (Centrelink) part-pension needs to be taken into account. For a couple, especially those who have some of their allocated pension money in a term allocated pension, the government part-pension can amount to around $20,000 p.a., which is significant. It means that you don’t have to have as much saved to retire when you can count on this.

  4. I have circa 1 Mil AUD in my private share portfolio and SMSF combined right now, however i am only 35, so no 30K pension for me and my wife, now or probably ever, just by virtual of the fact that we were born in the late 70’s instead of the 50’s….So unfair i think…. this along with the enormous transfer in wealth from the younger people in this country to the 50 plus segment, via the explosion in residential property prices, equals very very very unfair… I wonder how long till the average punter roughly my age and younger works this out, and decides to do something about it………

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