How to Have a Rich and Rewarding Retirement

By Jason Fittler

Making money is about discipline, most people do not have the courage to stick to their convictions and achieve the result they want.

Rather than talk theory I have decided to use my family as a real life scenario.

My wife and I would like to have an income of $100,000 pa in retirement. To do this I will need $1.2 million when I retire. If I want to leave something to my kids I will need $5,000,000.

I have 20 years to save $1.2 million.

Here is the plan.
1. I will split my return between income and capital growth. This will make sure I am moving ahead in time of low capital growth. (Like now)
2. I will have most of this in Super, as at present this is the most tax effective environment.
3. I am comfortable taking some risk and understand that from time to time my capital will go backwards.
4. I am time poor so I do not want any investments, which will require effort from me. So property is out.
5. I want professional advice so I will factor in there fees into the overall return.
6. I will take a long term view.

To achieve this result in 20 years we will need to salary sacrifice $26,000 into super each year and achieve a return of 8% pa.

Over the past 20 years the All Ords Accumulation index achieved a return of 21.5% pa as such this is where I will invest.

By taking on this challenge, our take home pay will decrease by $1,500 per month. This is a small price to pay to have a rich retirement, the alternative is to do nothing and live on a pension of $23,750 for us both.

Time
When investing, time is on your side. If you are young, these figures play in your favour.
For a 20 year old you will need to invest $4600 pa or $390 per month.
For a 30 year old you will need to invest $10,500 pa or $890 per month.

Would like a rich and rewarding retirement? 

Give us a call on 07 4771 4577 and let us help you put a plan into action.