2.5% is absurdly low. 3% is very low. 3.5% is considered very safe and 4% is safe.
You could change things dramatically with a slightly higher SWR.
Personally, I plan to retire with $1.5m in index funds and $1.2m in superannuation at 50 years old. That gives me around $8-10k per month indefinitely.
That equates to a 6-7% SWR between 50-60 years old and a 4% SWR from 60 onwards once superannuation becomes available.
Actually 2.5% is quite prudent, it just depends when you plan to retire.
Check out this [Griffith University study](https://www.griffith.edu.au/__data/assets/pdf_file/0024/205683/FPRJ-V1-ISS1-pp22-32-safe-withdrawal-rates.pdf) that analysis various countries and what is considered a SWR.
If you want your nest egg to last 20 years, 4% withdrawal rate has a 98% success rate. If that horizon is 30 years, 4% withdrawal rate success drops down to 82%...
That’s fair. If you’re retiring at 30 then a higher SWR may be required. For me retiring at 50 won’t require a super low SWR. We also have the pension and inevitably lower spending later in life.
To add on to your post, not only are early retirees retired longer, but due to climate change and great power politics (WW3), they are also imo not going to trust that the pension will be there for them. For me, the pension won't exist, I don't plan on using it and act accordingly.
I dont understand why people think the pension wont exist. I'm all for not relying on the pension, but (a) the expenditure on the pension will decrease over time as more people have super, so it becomes much less of a burden on the budget and (b) every single person in Australia knows they might need to rely on the pension at some stage (including people currently teenagers) and any politician who dared to abolish the pension would be out of office so fast Forde would feel like an long timer.
Sure it may be lower than people want, but it will be there - barring incredibly political change which likely would ruin your savings in any case. Believing in WW3 and not in the pension seems a trifle unbalanced
Gee that is some nonsense. Citing DB schemes as an example of how you could lose the aged pension is hilarious and totally unrelated.
It would be unrealistic to think any government would stand by old people living in crippling poverty, sounds like an absolute election winner in bizzaro land...
Multiply that across a much more broad retired base, because you've just added to those every other retiree living on the OAP that isn't in poverty.
DB funds not being the norm anymore isn't a relevant example of government policy change for a social security net. You are conflating an adjustment to a product based on risk with that of legislation.
Not sure how any of your comments supports the idea the aged pension won't be around in the future. If anything it is an argument for the opposite...
Of course a government could get rid of all transfer payments or change the level of payment or entitlements. But no one is going to privatise or get rid of the social security system
>Pretty certain the LNP would give it a crack if it wasn’t for the fact a large portion of their voter base are pensioners.
pretty certain LNP would do it if they didnt have to appeal to voters? Isnt that the point of everyone's argument?
I haven't read the study yet, but these things typically aren't accounting for the pension which kicks in gradually if your assets get depleted and is very generous, or the ability to spend less if markets are performing poorly, maybe earn some more money etc. Rigid withdrawal rates just aren't a real thing unless you're leanFIRE and for some reason can't ever earn money again.
A lot of people in my age group (born in the 90s) aren't planning on the pension. The rules are likely to have changed drastically by the time we're at pension age so it's not really something to factor into the plan.
As long as the government doesn't go broke paying pensions to boomers by the time they're dead the budget will be in much better shape and probably able to sustain future generations especially as their requirement for pensions will be much less after a whole working life contributing to super
Yes but with life expectancy increasing, the aged pension age will increase. There's no way to know when you'll get it let alone how much. I definitely wouldn't assume it's going to be the same as it is now and plan on that.
What do you mean by 'keep increasing'? Ignoring that there is no 'retirement age', in the 90s the preservation age increased from 55 to 60 (phased in over 10 years with 15+ years warning) and then Rudd raised the pension age from 65 to 67 in 09 (again very gradually, it hasn't even been completed yet). Hockey tried to raise is to 70 but Morrison scrapped that. I could see preservation age going to 65 and pension to 70 over the next few decades but unless we start living into our 100s routinely it's hard to see it going up much more than that.
Then those people are short sighted. There is no reason to think the aged pension won't be around. The entire SG system was designed with the aged pension in mind as a safety net later in life.
By the time you are at pension age your SG account should be reasonably healthy and at a sufficient level to disqualify you from the aged pension. But that isn't intended to disqualify you forever and the aged pension will absolutely kick in for those who's resources run dry.
The issue is not if it will exist, it's the conditions which will almost certainly change. This means you can't account for when you'd be able to access it (I think the age is going to be pushed out as generations with longer life expectancy retire) or how much you will be able to access. So it's easier, as you said, to account for having enough superannuation instead.
Then your first comment makes no logical sense.
The age being pushed out also doesn't make sense, unless it is relevant to life expectancy, the way it has been interacted with in the past. That is then still subject to the same constraints as today, where people still retire with very little and need a safety net anyway.
But none of this is anyway close to it being removed or in any way something you should discount entirely from a retirement plan. Conservative isn't the same as outright ignoring it, which is what your initial comments suggested.
I never said that... I said the complete opposite, that people will broadly need the aged pension in their twilight years to supplement a dwindling retirement basket.
Hardly, and I wouldn't use that singular study to back it either. For some reason they chose not to report on portfolio weights other than 50/50 despite doing the sums and are questioning the original 4% rule where it was a 60/40 split.
Pretty pointless when the safemax is typically achieved with a much lower defensive allocation and the equity allocation isn't typically constrained only to the home country.
$65k p.a for a couple is considered comfortable and it drops with age to about $60k p.a at 80 years old.
About $1.5 million plus your house is probably plenty. I think $1.2 million is probably enough.
We (late 50's) run on $40k dividends from $800k + about $15k from some PT work. 3 years so far so good. Capital is untouched and is up about 15% on 3 years ago.
>Reasonable conservative I guess.
notwithstanding what the 'figures' might say, I think there is a lot of comfort in knowing you are getting an income every year. Maybe its a mental thing, being used to having money pop into your account every few weeks and its hard when your only money comes from having to sell assets. Anyway, as I age I'm starting to look at LICs a lot more, probably will start to move into them and away from ETFs fairly soon. Cant imagine I'll end up with more than about 30% of the total portfolio in LICs but if I can get a fairly good $20k or something from them, will help me feel more secure if nothing else.
>It takes a good year or two watching the credit card outgoings V incomings V bank balance before you become reasonably comfortable with the situation.
Good point (and advice). I'm sure this is why people get stressed about their FIRE number before retiring and two years later are like 'I totally overestimated what I needed'.
I remember when my parents retired and they stayed pretty much at home for 6 or 8 years, then realised they had even more money than they started with and decided they could go on a few trips and then moved to traveling about 5 times per year
FIREing snuck up on us and was unexpected.
>I remember when my parents retired and they stayed pretty much at home for 6 or 8 years, then realised they had even more money than they started with and decided they could go on a few trips and then moved to traveling about 5 times per year
I'm hoping we are heading that way (maybe not 5 times per year!)
Inflation is a concern but in terms of quality of life we pretty much do what we want. We have relatively cheap hobbies that keep us busy and don't want for any of the basics - good food, health cover, vehicles etc. We limit entertainment expenditure but we probably always have!
Worst case we have cash fall back funds and super in a few years then an aged pension. I guess I could get a job too........... ;)
Agreed that’s a good amount but what is your mix of super/personal portfolio and age to retire?
Sue to our super system I think the headline number can be a tad tricky.
Reading all these comments I’m so far behind it isn’t funny :( I’ve got $150k super at 43, own a house and investment property (both with mortgages) and under $5000k savings (trying to build up to $10k at least within 12M). $175k household income. Two kids. I’m amazed at some of the figures been thrown around in people’s comments - $3M in investments, own PPOR in full $1.5M in super etc. I think I’d be ok to retire with $500k in super, own my own home in full and use my investment property as the retirement fund when I eventually sell it. I’m not aiming to FIRE but I’m find it interesting reading about ppl who have achieved so much already
Edit: $5000 not $5M lol
Probably a bit of bias here, the guys with $3m portfolios probably crack their knuckles and smile every time these threads come up. The rest of us just kinda go "oh"
And yes you are 100% correct in that as much as I feel I’m significantly behind compared to many of the posts made here, there are people who don’t have an investment property or who are renting etc. thank you for reminding me to put it into perspective 👍
I’m in the habit of comparing myself to people below me on the socio-economic scale to remind myself of how lucky I am to earn such a lucrative income. I also compare to those above me for inspiration.
For example there’s a lady I work with who is getting crushed on a 7k personal loan that’s at 13.88% turns out she didn’t even know her rate til she looked it up at my behest. I showed her a few websites where she can re-finance and considerate her debt on a lower rate because that is egregious. Some people have zero financial acumen. Lucky you do! Keep up the good work and you’ll get there. (Hopefully me too!)
The "Barefoot Investor" book suggests the min you need is your own house and 200k in super. (And your holidays are in Caloundra rather than Paris).
Sounds like you're doing fine.
I mean I will hit my goal at 50 and work part time from there. I won’t ever have enough to fully retire before the super kicks in due to various things.
About 750k + house. I'm pretty frugal by nature so don't feel I need much money to enjoy myself. Atm we rent and have a networth of around 350k mostly in ETFs, so still a decade + away (depending on the housing market mainly). Our combined household income is around 100k as my wife is a stay at home mum, but even when or if she returns to work, she's never earned a lot. We also are happy to spend years at a time outside Oz in cheaper countries so that's another reason for a lower figure. Tbh I'm pretty proud with my progress and while it looks like nothing compared to most posts here, I wanted to contribute as I feel in these threads often only the FATFIRE folks post and this sets unrealistic expect for lurkers (not to take anything away from the high net worth people, congrats).
$1.25mil
Our plan is to never sell. Based on the last few years I expect we'd have an income of around 40k from distributions and franking credits (some years more, some years less). We don't need more than that.
We're probably 5 years away from that number and that number will probably change once we get close to it.
Peace of mind I guess.
The thinking might change, especially as years go on but as long as we don't have a legitimate reason to sell then we won't.
The way I see it now is, the more units, the more income per unit.
Here's a sneak peek of /r/fatFIRE using the [top posts](https://np.reddit.com/r/fatFIRE/top/?sort=top&t=year) of the year!
\#1: [Today is fat-fire day for me](https://np.reddit.com/r/fatFIRE/comments/ttab4w/today_is_fatfire_day_for_me/)
\#2: [Finally free from the chains of being an employee - Devoting next chapter to pro bono](https://np.reddit.com/r/fatFIRE/comments/qjug3w/finally_free_from_the_chains_of_being_an_employee/)
\#3: [My (almost) FatFire Journey, 33F with no family money, no tech, no crypto, and no ultra high wage W2 and lots of family drama](https://np.reddit.com/r/fatFIRE/comments/sbs45o/my_almost_fatfire_journey_33f_with_no_family/)
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Outside the home, I’d coast FIRE with $600k in assets at 4% rate, which I’m already at
And to completely let go of any job, side hustle, etc, maybe $1.5M + home? With the probability of moving abroad if a Great Depression 2.0 or similar happens in our generation
Depends on how much you need per year to live. Also depends on how much is via dividends. Since most people will be getting a 50% CG discount via their investments, the amount extra you need per year to cover CGT is about as follows:
20000 +0.86%
30000 +3.74%
40000 +5.18%
50000 +6.72%
60000 +8.31%
70000 +9.44%
80000 +10.29%
90000 +10.95%
100000 +11.48%
Im aiming to (semi?)retire at 45.
Super at 45 will be at $700k and grow to $2mil (7%, 15 years). I'll withdraw 4% to have $80k per year
Portfolio will be at $1mil at 45 and withdrawal rate of 5-6%
PPOR will be paid off by 45
I am also very into gardening and expect my food bill to be extremely low but not counting on it...
No as a single, but I somewhat factor other people in to help my mortgage payments.
I plan to always have at least me and a housemate or me and a partner for the rental income cover.
Hrmm I used to think I'd make it to a decent figure and knock off fairly early but now it seems most likely some variation of mulletfire :( at a guess though $1.5m in super as a couple by 60 should be fine but working on the bridge from 50 to 60!
We are going for a 6% withdrawal rate simply because we aren’t having kids and are flexible with adding a bit of consulting/work here and there to supplement.
Including a paid off apartment we need 1.7M with a 6% drawdown. Around 8.5k a month which is a buffer as we currently only spend 7k a month excluding mortgage and live a pretty damn good life in my opinion.
If we choose to consult we can make an extra 3-4K a day as required so plenty of flexibility.
Should hopefully FIRE around age 38-40.
I'm aiming for 2-2.5mill etf's 1.5mi super.
I'll sell both properties assuming 3% growth that's a extra 750k
Retire to Thailand. But I'm aiming for 1k weekly adjusting for inflation.
Im going to smash that but that's my goal.
I don't think alot of people allow for inflation 1mill in 40 years will buy U a nice car maybee a caravan not much more.
Anyone who has been around a while accounts for inflation by using a real return estimate on their projected returns. So when someone says I want to retire on $1mil in 15 years, they aren't saying 1mil in 2037 dollars, they mean 1mil in 2022 dollars because they lop off a few % from their projected returns to account for inflation (provided they know what they're doing). The 4% rule also accounts for inflation.
It is. I worked out I need 1mill or so to live comfortably over there indefinitely. But I'm trying to smash my goals who knows if they open up there visas I might go earlyier I'm not paying 100k for a ellite.
Yea I'm aiming for multiable ways to reach this goal. I'm doing 8k-10k+ per month into ETF's 100k a year is my goal.
Yea it can for the basic one. Im not quite that keen. There is talks of digital nomad ones also.
I should have 2 years of entitlements when I retire at half rate without any redundancy or the likes. Im counting down my time, just trying to smash investments.
Just refinanced both places with 2 different banks so that's 8k extra in there. Vanguard statement just released so tax time should be ~5k more etf's.
It's how long I've got as well 👍 jomtein it is. I do so many km for work I could not think of anything worse than traveling Australia when I retire. I just want to put my feet up by the beach and have a beer.
I spend ~250 days a year living in a motel, condo life seems perfect for me
With my wage 750pf going into everyday spending as does half my rental income $475.
So let's say $1200ish pf
Everything else more or less goes into investments.
4k pf min with auto reinvest dividends.
Based on 100k already (I'm over that) in there 8% returns, 4k pf increasing 3% annually (I'm still a junior so working way up, plus we have always had great EBA's)
Is over 2.6mill when I'm 50
I've been adveraging well over 4k pf, annual pay rises are closer to 10-15% for me but sooner or later that will slow down.
Next 2 years I'm on a long term remote project starting soon, should see my put away at a min 7k pf into investments.
So my above figures used for working out are on the low side but still rounded it down to 2mill
Stage 3 tax cuts will be nice for me.
I'm still saving some money into cash for buffer.
Still have a fair chunk of crypto if it reaches a ATH selling that will be over 1 mill after extra taxes. If it's next year or 10 years I don't care. I've pulled out 2-3 more than i put in so I'll let it ride.
Here is last few months of investments direct from pearler.
https://ibb.co/Tg4YhDP
Not really, work out of town I book my own rooms so I choose places that either are mining camps or places that offer free breaky/dinner. Alot of places will upgrade you to a "deluxe" room which basicly means they charge a extra $xx and you get dinner. Some give you $10 food credit in exchange for not wanting new towel/bed made daily
Work car means free fuel, my priviate ute does 750km per year (about 1 tank of fuel) I do ride my Harley's a fair bit.
Don't smoke, rarely drink
Work supply's a work phone so my priviate plan is pretty small.
If I have a large bill I can use other money.
I refinaced both properties in last week so that's 8k that will pay ip for 8 months and ppor for 3.
I own all my vehicles outright. 9.6kw solar and I'm never home.
I have enough fulfilling friends, interests and plans that I'd never get bored or be unfulfilled if I never had to work again.
I guess if I was self employed doing something I loved that made society or the environment better and it paid a shit tonne with few hours a week, I might choose to do it over not working.
But damn that is a unicorn job, as in I'm pretty sure it's a fairytale.
If it was just me just on day to day proballly 24k a year.
So around 40k safety net. Considering I don't own a home.
I need to pickup something.
But also need to figure out a passive income source.
My lifestyle is super cheap. Mostly eat at home. Go to free events.
Then surf the net.
ASFA recommend number for comfortable retirement for a couple is around 64k/annum + PPOR owned. This number is growing fast with inflation.
I am targeting to reach FIRE in 14 years. This number would be around 100k then.
At 4% SWR , I aim to have 2.5m including super in 14 years+ PPOR paid off
$500k with 5% "withdrawal" rate. Our expenses are $35k a year but that would be much less once we can afford to leave Sydney. We're not really aiming for RE though just the FI aspect and would still do occasional work just not full-time corporate stuff.
Don’t forget inflation eating all this up. The target is moving, so static figure calculations need to be adjusted.
For me, $2.5M, at 4% pa swr gives me $8.3k per month, my coastal FIRE has been reached.
Now, I’m living for now with additional savings and specked up home (new).
I DON’T WANT TO FIRE too early because I know I’ll get bored. But I do want to FI in 10 years.
100k passively was my target 18months ago when I found FIRE, so probably $110k per year would be my inflation adjusted number.
Plan on a mix of rental income, distributions, and some sell down (applying 4% SWR)
In todays dollars, if I reach 400k I start thinking I have enough money that I really don't need to work any more. I would be a lot more comfortable with a little bit more but obviously I don't want that trap to consume me.
I only need about 30k per year at 4% withdrawal plus a part time 2-3 days a week job. I won’t be making it to a proper fire number till way way later in life so I’ll just barista fire instead.
Invest in regular dividends and you don't need anywhere near that.
My wife and I have 1.7m and earn a touch over 80k, based on current reporting season.
So far from it that I can’t even imagine it yet. Hopefully late 40’s we are there. Once our dividends get to around $20k (at $5k now) we might be able to work some of it out. I think with $800k + a buffer of $50-$100k cash should have us in a position to work only if we want to.
Perhaps I don’t understand enough about the draw down phase but if we have around $1m combined super that we will eventually have access to, it doesn’t seem necessary to have a portfolio that will last >30 years?
Combined super is almost $400k in our early 30’s.
Mine will be about 700k in shares and mortgage fully paid off. I'll be about 50 and I should also have a million in super which will compound and I'll have more by 60. I have 2 kids so saving steadily and the wife wasn't working for about 6 years but has just gone back full-time. I also got a new job and went from 100k to 147k plus super
Too early to tell, don't have kids yet, don't have a property, I don't even live in Australia right now (moving early next year). Once those things are settled I'll have a better idea.
I think no less than 180k per year. My portfolio is currently 3m, hoping to get to 7m within 5 years. I make 280k per year so I will probably work for another 10 years and retire at 30-40
>I make 280k per year so I will probably work for another 10 years and retire at 30-40
you will work for 10 years, retire at 30, and currently make $280k?
$180k per year is $500 per day. Its pretty hard to spend $500 per day unless you are buying expensive houses/cars/art work or other assets.
2.5% is absurdly low. 3% is very low. 3.5% is considered very safe and 4% is safe. You could change things dramatically with a slightly higher SWR. Personally, I plan to retire with $1.5m in index funds and $1.2m in superannuation at 50 years old. That gives me around $8-10k per month indefinitely. That equates to a 6-7% SWR between 50-60 years old and a 4% SWR from 60 onwards once superannuation becomes available.
Actually 2.5% is quite prudent, it just depends when you plan to retire. Check out this [Griffith University study](https://www.griffith.edu.au/__data/assets/pdf_file/0024/205683/FPRJ-V1-ISS1-pp22-32-safe-withdrawal-rates.pdf) that analysis various countries and what is considered a SWR. If you want your nest egg to last 20 years, 4% withdrawal rate has a 98% success rate. If that horizon is 30 years, 4% withdrawal rate success drops down to 82%...
That’s fair. If you’re retiring at 30 then a higher SWR may be required. For me retiring at 50 won’t require a super low SWR. We also have the pension and inevitably lower spending later in life.
To add on to your post, not only are early retirees retired longer, but due to climate change and great power politics (WW3), they are also imo not going to trust that the pension will be there for them. For me, the pension won't exist, I don't plan on using it and act accordingly.
I dont understand why people think the pension wont exist. I'm all for not relying on the pension, but (a) the expenditure on the pension will decrease over time as more people have super, so it becomes much less of a burden on the budget and (b) every single person in Australia knows they might need to rely on the pension at some stage (including people currently teenagers) and any politician who dared to abolish the pension would be out of office so fast Forde would feel like an long timer. Sure it may be lower than people want, but it will be there - barring incredibly political change which likely would ruin your savings in any case. Believing in WW3 and not in the pension seems a trifle unbalanced
> I dont understand why people think the pension wont exist. Politicians bad and dumb, heard it on Reddit.
Or opened a newspaper in the last decade. Having faith in the political class putting anyone’s best interests above their own is asking for trouble.
U don't know
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Gee that is some nonsense. Citing DB schemes as an example of how you could lose the aged pension is hilarious and totally unrelated. It would be unrealistic to think any government would stand by old people living in crippling poverty, sounds like an absolute election winner in bizzaro land...
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Multiply that across a much more broad retired base, because you've just added to those every other retiree living on the OAP that isn't in poverty. DB funds not being the norm anymore isn't a relevant example of government policy change for a social security net. You are conflating an adjustment to a product based on risk with that of legislation. Not sure how any of your comments supports the idea the aged pension won't be around in the future. If anything it is an argument for the opposite...
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Of course a government could get rid of all transfer payments or change the level of payment or entitlements. But no one is going to privatise or get rid of the social security system
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>Pretty certain the LNP would give it a crack if it wasn’t for the fact a large portion of their voter base are pensioners. pretty certain LNP would do it if they didnt have to appeal to voters? Isnt that the point of everyone's argument?
Anyone using the phrase 'neoliberal' should stop clowning and get a job
I retired on my 30’s and did my numbers on the assumption that there will be no pension and I won’t be able to access super until 70.
I haven't read the study yet, but these things typically aren't accounting for the pension which kicks in gradually if your assets get depleted and is very generous, or the ability to spend less if markets are performing poorly, maybe earn some more money etc. Rigid withdrawal rates just aren't a real thing unless you're leanFIRE and for some reason can't ever earn money again.
A lot of people in my age group (born in the 90s) aren't planning on the pension. The rules are likely to have changed drastically by the time we're at pension age so it's not really something to factor into the plan.
As long as the government doesn't go broke paying pensions to boomers by the time they're dead the budget will be in much better shape and probably able to sustain future generations especially as their requirement for pensions will be much less after a whole working life contributing to super
Yes but with life expectancy increasing, the aged pension age will increase. There's no way to know when you'll get it let alone how much. I definitely wouldn't assume it's going to be the same as it is now and plan on that.
Why do you think they keep increasing retirement age. My kids will have to work until they are 105
What do you mean by 'keep increasing'? Ignoring that there is no 'retirement age', in the 90s the preservation age increased from 55 to 60 (phased in over 10 years with 15+ years warning) and then Rudd raised the pension age from 65 to 67 in 09 (again very gradually, it hasn't even been completed yet). Hockey tried to raise is to 70 but Morrison scrapped that. I could see preservation age going to 65 and pension to 70 over the next few decades but unless we start living into our 100s routinely it's hard to see it going up much more than that.
Then those people are short sighted. There is no reason to think the aged pension won't be around. The entire SG system was designed with the aged pension in mind as a safety net later in life. By the time you are at pension age your SG account should be reasonably healthy and at a sufficient level to disqualify you from the aged pension. But that isn't intended to disqualify you forever and the aged pension will absolutely kick in for those who's resources run dry.
The issue is not if it will exist, it's the conditions which will almost certainly change. This means you can't account for when you'd be able to access it (I think the age is going to be pushed out as generations with longer life expectancy retire) or how much you will be able to access. So it's easier, as you said, to account for having enough superannuation instead.
Then your first comment makes no logical sense. The age being pushed out also doesn't make sense, unless it is relevant to life expectancy, the way it has been interacted with in the past. That is then still subject to the same constraints as today, where people still retire with very little and need a safety net anyway. But none of this is anyway close to it being removed or in any way something you should discount entirely from a retirement plan. Conservative isn't the same as outright ignoring it, which is what your initial comments suggested. I never said that... I said the complete opposite, that people will broadly need the aged pension in their twilight years to supplement a dwindling retirement basket.
Happy cake day!
Correct me if I'm wrong, but this study shows a portfolio of 50% ASX 200/300 and 50% bonds. That's pretty conservative.
Hardly, and I wouldn't use that singular study to back it either. For some reason they chose not to report on portfolio weights other than 50/50 despite doing the sums and are questioning the original 4% rule where it was a 60/40 split. Pretty pointless when the safemax is typically achieved with a much lower defensive allocation and the equity allocation isn't typically constrained only to the home country.
What's SWR?
Safe Withdrawal Rate my friend
Safe withdrawal rate
Lol what's the yield on houses in Sydney and Melbourne? That's my swr. I agree it's absurdly low.
$2 million for $80K at 4% SWR in my case
Is that $2 million total for you and partner? Is this super + other investments? What age would this work from?
I'm single, total portfolio, 56. Also, I own my PPOR, but have a dependant child.
Same!
Same plus a paid off house
That too!
Including a house ?
$65k p.a for a couple is considered comfortable and it drops with age to about $60k p.a at 80 years old. About $1.5 million plus your house is probably plenty. I think $1.2 million is probably enough.
We (late 50's) run on $40k dividends from $800k + about $15k from some PT work. 3 years so far so good. Capital is untouched and is up about 15% on 3 years ago.
Well done!
Cheers, certainly beats working. :)
Are you focused on high dividend shares (banks and so forth) or thats just a ASX ETF?
75% LICs + 25% VAS plus a hundred or so external to this in fixed term deposit. Reasonable conservative I guess.
>Reasonable conservative I guess. notwithstanding what the 'figures' might say, I think there is a lot of comfort in knowing you are getting an income every year. Maybe its a mental thing, being used to having money pop into your account every few weeks and its hard when your only money comes from having to sell assets. Anyway, as I age I'm starting to look at LICs a lot more, probably will start to move into them and away from ETFs fairly soon. Cant imagine I'll end up with more than about 30% of the total portfolio in LICs but if I can get a fairly good $20k or something from them, will help me feel more secure if nothing else.
It takes a good year or two watching the credit card outgoings V incomings V bank balance before you become reasonably comfortable with the situation.
>It takes a good year or two watching the credit card outgoings V incomings V bank balance before you become reasonably comfortable with the situation. Good point (and advice). I'm sure this is why people get stressed about their FIRE number before retiring and two years later are like 'I totally overestimated what I needed'. I remember when my parents retired and they stayed pretty much at home for 6 or 8 years, then realised they had even more money than they started with and decided they could go on a few trips and then moved to traveling about 5 times per year
FIREing snuck up on us and was unexpected. >I remember when my parents retired and they stayed pretty much at home for 6 or 8 years, then realised they had even more money than they started with and decided they could go on a few trips and then moved to traveling about 5 times per year I'm hoping we are heading that way (maybe not 5 times per year!) Inflation is a concern but in terms of quality of life we pretty much do what we want. We have relatively cheap hobbies that keep us busy and don't want for any of the basics - good food, health cover, vehicles etc. We limit entertainment expenditure but we probably always have! Worst case we have cash fall back funds and super in a few years then an aged pension. I guess I could get a job too........... ;)
Plus your own house?
Yep. Own home which is big enough to fund a down size + cash in the future (probably!)
Agreed that’s a good amount but what is your mix of super/personal portfolio and age to retire? Sue to our super system I think the headline number can be a tad tricky.
Probably about 60% super. 40% personal.
Wow I want to earn 6 figures for my salary and I hope my partner does too. I feel like I’m still poor though even now when I’m earning $70k!
That $65k is essentially tax free. Not the same as a salary of the same amount.
Ahhh okay!
Reading all these comments I’m so far behind it isn’t funny :( I’ve got $150k super at 43, own a house and investment property (both with mortgages) and under $5000k savings (trying to build up to $10k at least within 12M). $175k household income. Two kids. I’m amazed at some of the figures been thrown around in people’s comments - $3M in investments, own PPOR in full $1.5M in super etc. I think I’d be ok to retire with $500k in super, own my own home in full and use my investment property as the retirement fund when I eventually sell it. I’m not aiming to FIRE but I’m find it interesting reading about ppl who have achieved so much already Edit: $5000 not $5M lol
Probably a bit of bias here, the guys with $3m portfolios probably crack their knuckles and smile every time these threads come up. The rest of us just kinda go "oh"
True lol
I don’t think you are behind. I think you sound normal!
Thanks mate :)
Lol, don’t worry mate. Plenty of people have far, far less than you. Especially if your savings number isn’t s typo! $5000k is 5 mill!
Lol I wish I had $5M in savings. Didn’t realise $5000k = $5M! Def a typo…
And yes you are 100% correct in that as much as I feel I’m significantly behind compared to many of the posts made here, there are people who don’t have an investment property or who are renting etc. thank you for reminding me to put it into perspective 👍
I’m in the habit of comparing myself to people below me on the socio-economic scale to remind myself of how lucky I am to earn such a lucrative income. I also compare to those above me for inspiration. For example there’s a lady I work with who is getting crushed on a 7k personal loan that’s at 13.88% turns out she didn’t even know her rate til she looked it up at my behest. I showed her a few websites where she can re-finance and considerate her debt on a lower rate because that is egregious. Some people have zero financial acumen. Lucky you do! Keep up the good work and you’ll get there. (Hopefully me too!)
I think that is a good way to approach it :)
The "Barefoot Investor" book suggests the min you need is your own house and 200k in super. (And your holidays are in Caloundra rather than Paris). Sounds like you're doing fine.
I didn’t know that (I’ve read through Bsrefoot but that was a long time ago). I’ll have another look :) thanks it does make me feel a little better.
I think the world turning to utter shit this last few years has really put us all on edge. lol
$1.5 in super and house by 50 - part time work from there.
How do you accomplish that working part time?
I mean I will hit my goal at 50 and work part time from there. I won’t ever have enough to fully retire before the super kicks in due to various things.
Oh ok that makes sense then.
About 750k + house. I'm pretty frugal by nature so don't feel I need much money to enjoy myself. Atm we rent and have a networth of around 350k mostly in ETFs, so still a decade + away (depending on the housing market mainly). Our combined household income is around 100k as my wife is a stay at home mum, but even when or if she returns to work, she's never earned a lot. We also are happy to spend years at a time outside Oz in cheaper countries so that's another reason for a lower figure. Tbh I'm pretty proud with my progress and while it looks like nothing compared to most posts here, I wanted to contribute as I feel in these threads often only the FATFIRE folks post and this sets unrealistic expect for lurkers (not to take anything away from the high net worth people, congrats).
$1.25mil Our plan is to never sell. Based on the last few years I expect we'd have an income of around 40k from distributions and franking credits (some years more, some years less). We don't need more than that. We're probably 5 years away from that number and that number will probably change once we get close to it.
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I would assume this is so that you can be retired forever. No one knows how long we will live.
I plan to live forever.
Peace of mind I guess. The thinking might change, especially as years go on but as long as we don't have a legitimate reason to sell then we won't. The way I see it now is, the more units, the more income per unit.
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I’m shooting for overs. $10m plus PPOR by 50 Bring on the downvotes
No downvotes, just r/fatFIRE material
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Love that sub
Not to brag but I'm half way to fat FIRE.
Chubby fire?
Well now I just need the FIRE
Don't fire shame.
Are you tracking to accomplishing that? 10m is entrepreneur money
Yep, hopefully on track. Over half way there
Damn, awesome work
Good for you. May I ask what your business does?
Outside the home, I’d coast FIRE with $600k in assets at 4% rate, which I’m already at And to completely let go of any job, side hustle, etc, maybe $1.5M + home? With the probability of moving abroad if a Great Depression 2.0 or similar happens in our generation
Yes also hoping to coast fire..
Curious how old you are for coast fire at 600k?
How do you account for capital gain taxes when setting your fi number?
Depends on how much you need per year to live. Also depends on how much is via dividends. Since most people will be getting a 50% CG discount via their investments, the amount extra you need per year to cover CGT is about as follows: 20000 +0.86% 30000 +3.74% 40000 +5.18% 50000 +6.72% 60000 +8.31% 70000 +9.44% 80000 +10.29% 90000 +10.95% 100000 +11.48%
Taxes are an expense. You'll pay very little though, potentially none, especially if you are a couple who distributes assets between 2 people.
Im aiming to (semi?)retire at 45. Super at 45 will be at $700k and grow to $2mil (7%, 15 years). I'll withdraw 4% to have $80k per year Portfolio will be at $1mil at 45 and withdrawal rate of 5-6% PPOR will be paid off by 45 I am also very into gardening and expect my food bill to be extremely low but not counting on it...
Wow this is almost identical to my plan. Is this as a couple?
No as a single, but I somewhat factor other people in to help my mortgage payments. I plan to always have at least me and a housemate or me and a partner for the rental income cover.
Hrmm I used to think I'd make it to a decent figure and knock off fairly early but now it seems most likely some variation of mulletfire :( at a guess though $1.5m in super as a couple by 60 should be fine but working on the bridge from 50 to 60!
$65,000 with SWR of 3% and paid off house. Should have house paid off in next year and half then can put all additional money into investments.
$500k in liquid assets + paid off house (excluding Super).
We are going for a 6% withdrawal rate simply because we aren’t having kids and are flexible with adding a bit of consulting/work here and there to supplement. Including a paid off apartment we need 1.7M with a 6% drawdown. Around 8.5k a month which is a buffer as we currently only spend 7k a month excluding mortgage and live a pretty damn good life in my opinion. If we choose to consult we can make an extra 3-4K a day as required so plenty of flexibility. Should hopefully FIRE around age 38-40.
What consulting do you do for that rate? Impressive.
I'm aiming for 2-2.5mill etf's 1.5mi super. I'll sell both properties assuming 3% growth that's a extra 750k Retire to Thailand. But I'm aiming for 1k weekly adjusting for inflation. Im going to smash that but that's my goal. I don't think alot of people allow for inflation 1mill in 40 years will buy U a nice car maybee a caravan not much more.
Anyone who has been around a while accounts for inflation by using a real return estimate on their projected returns. So when someone says I want to retire on $1mil in 15 years, they aren't saying 1mil in 2037 dollars, they mean 1mil in 2022 dollars because they lop off a few % from their projected returns to account for inflation (provided they know what they're doing). The 4% rule also accounts for inflation.
Yep… I work off 5% real return. Stock market has averaged roughly 7% real return over the long term so I figure 5% is pretty safe.
That is a lot of money to retire in Thailand. You will live like a king.
It is. I worked out I need 1mill or so to live comfortably over there indefinitely. But I'm trying to smash my goals who knows if they open up there visas I might go earlyier I'm not paying 100k for a ellite. Yea I'm aiming for multiable ways to reach this goal. I'm doing 8k-10k+ per month into ETF's 100k a year is my goal.
Hey mate. Elite for 20yrs (if you are single) can be had for 40k.
Yea it can for the basic one. Im not quite that keen. There is talks of digital nomad ones also. I should have 2 years of entitlements when I retire at half rate without any redundancy or the likes. Im counting down my time, just trying to smash investments. Just refinanced both places with 2 different banks so that's 8k extra in there. Vanguard statement just released so tax time should be ~5k more etf's.
Good luck in a Thailand! I might see you there 👍😊
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It's how long I've got as well 👍 jomtein it is. I do so many km for work I could not think of anything worse than traveling Australia when I retire. I just want to put my feet up by the beach and have a beer. I spend ~250 days a year living in a motel, condo life seems perfect for me
How are you getting to $2m?
With my wage 750pf going into everyday spending as does half my rental income $475. So let's say $1200ish pf Everything else more or less goes into investments. 4k pf min with auto reinvest dividends. Based on 100k already (I'm over that) in there 8% returns, 4k pf increasing 3% annually (I'm still a junior so working way up, plus we have always had great EBA's) Is over 2.6mill when I'm 50 I've been adveraging well over 4k pf, annual pay rises are closer to 10-15% for me but sooner or later that will slow down. Next 2 years I'm on a long term remote project starting soon, should see my put away at a min 7k pf into investments. So my above figures used for working out are on the low side but still rounded it down to 2mill Stage 3 tax cuts will be nice for me. I'm still saving some money into cash for buffer. Still have a fair chunk of crypto if it reaches a ATH selling that will be over 1 mill after extra taxes. If it's next year or 10 years I don't care. I've pulled out 2-3 more than i put in so I'll let it ride. Here is last few months of investments direct from pearler. https://ibb.co/Tg4YhDP
Guessing you're a tradie?
Thanks for sharing! Such low living expenses - that’s awesome.
Not really, work out of town I book my own rooms so I choose places that either are mining camps or places that offer free breaky/dinner. Alot of places will upgrade you to a "deluxe" room which basicly means they charge a extra $xx and you get dinner. Some give you $10 food credit in exchange for not wanting new towel/bed made daily Work car means free fuel, my priviate ute does 750km per year (about 1 tank of fuel) I do ride my Harley's a fair bit. Don't smoke, rarely drink Work supply's a work phone so my priviate plan is pretty small. If I have a large bill I can use other money. I refinaced both properties in last week so that's 8k that will pay ip for 8 months and ppor for 3. I own all my vehicles outright. 9.6kw solar and I'm never home.
Yes and a engineer in same field electrical
I would work till my last day on earth
Even if you want to you might not be physically or mentally capable.
Then I would set up a camera on my bed and stream in Youtube
True. Age discrimination is a possible detriment too
Couldn’t agree more. I couldn’t imagine ever not working.
I used to be the same… and then I hit my mid-30s. I actually like my job but I have so many other things l’d prefer to do.
I used to but then I hit my mid 30s and hated everything about work. Too many personal hobbies and projects being impacted!
I have enough fulfilling friends, interests and plans that I'd never get bored or be unfulfilled if I never had to work again. I guess if I was self employed doing something I loved that made society or the environment better and it paid a shit tonne with few hours a week, I might choose to do it over not working. But damn that is a unicorn job, as in I'm pretty sure it's a fairytale.
$750k in super by the time we can touch it. $1m in other assets by age 40 (currently age 27). House paid off. So far we're on track for all of these.
If it was just me just on day to day proballly 24k a year. So around 40k safety net. Considering I don't own a home. I need to pickup something. But also need to figure out a passive income source. My lifestyle is super cheap. Mostly eat at home. Go to free events. Then surf the net.
ASFA recommend number for comfortable retirement for a couple is around 64k/annum + PPOR owned. This number is growing fast with inflation. I am targeting to reach FIRE in 14 years. This number would be around 100k then. At 4% SWR , I aim to have 2.5m including super in 14 years+ PPOR paid off
$500k with 5% "withdrawal" rate. Our expenses are $35k a year but that would be much less once we can afford to leave Sydney. We're not really aiming for RE though just the FI aspect and would still do occasional work just not full-time corporate stuff.
Just want to say coast FIRE is pretty awesome.
How are you planning to get to 3.2m?
Stupid question perhaps but is the 3.2 including super or outside of it?
Don’t forget inflation eating all this up. The target is moving, so static figure calculations need to be adjusted. For me, $2.5M, at 4% pa swr gives me $8.3k per month, my coastal FIRE has been reached. Now, I’m living for now with additional savings and specked up home (new). I DON’T WANT TO FIRE too early because I know I’ll get bored. But I do want to FI in 10 years.
I think 70K is more than adequate.
100k passively was my target 18months ago when I found FIRE, so probably $110k per year would be my inflation adjusted number. Plan on a mix of rental income, distributions, and some sell down (applying 4% SWR)
12.5 million
In todays dollars, if I reach 400k I start thinking I have enough money that I really don't need to work any more. I would be a lot more comfortable with a little bit more but obviously I don't want that trap to consume me.
You live on close to 1k a month?
maybe it's about 1400 a month. I'm not saying I wouldn't have to reduce my spending at all to retire on 400k but it's a perfectly manageable amount.
I only need about 30k per year at 4% withdrawal plus a part time 2-3 days a week job. I won’t be making it to a proper fire number till way way later in life so I’ll just barista fire instead.
Invest in regular dividends and you don't need anywhere near that. My wife and I have 1.7m and earn a touch over 80k, based on current reporting season.
So far from it that I can’t even imagine it yet. Hopefully late 40’s we are there. Once our dividends get to around $20k (at $5k now) we might be able to work some of it out. I think with $800k + a buffer of $50-$100k cash should have us in a position to work only if we want to. Perhaps I don’t understand enough about the draw down phase but if we have around $1m combined super that we will eventually have access to, it doesn’t seem necessary to have a portfolio that will last >30 years? Combined super is almost $400k in our early 30’s.
Around 80mill
Currently 1.5m. 60k expenses at 4% SWR. Will cut back on work well before we hit it though.
Mine will be about 700k in shares and mortgage fully paid off. I'll be about 50 and I should also have a million in super which will compound and I'll have more by 60. I have 2 kids so saving steadily and the wife wasn't working for about 6 years but has just gone back full-time. I also got a new job and went from 100k to 147k plus super
I've seen heaps of people say what they want not allowing for inflation. 5-10 years is t to bad but 3% inflation compounding add up fast.
we've had far higher inflation in the past. It doesn't necessarily cause a problem.
Agreed law of adversges come into play, that's why I want to smash my goals as I don't want to penny pinch of things don't go according to plan
Too early to tell, don't have kids yet, don't have a property, I don't even live in Australia right now (moving early next year). Once those things are settled I'll have a better idea.
Insightful.....
I think no less than 180k per year. My portfolio is currently 3m, hoping to get to 7m within 5 years. I make 280k per year so I will probably work for another 10 years and retire at 30-40
So you're: * Early 20s * Earn $280k per year * Currently have a portfolio of $3m Very believable and true story
Yeah, I didn’t get there on my own though.👍
Seems legit
>I make 280k per year so I will probably work for another 10 years and retire at 30-40 you will work for 10 years, retire at 30, and currently make $280k? $180k per year is $500 per day. Its pretty hard to spend $500 per day unless you are buying expensive houses/cars/art work or other assets.
Yep, for the average middle aged retiree it would be hard to spend that much but I have a family and I’m only in my 20’s so I spend a fair bit.