How much income do I need in my retirement?
- Invest money to get the highest return – well, who cares about market being so unpredictable?
- withdraw the least,
- eat grass from your garden,
- don’t go out,
- avoid your grandkids.
- The highest possible part of your income should come from government Age Pension – why you might ask – great question:
- Because Age Pension is a guaranteed income – no matter what happens anywhere in the world, government will always pay you your entitlement.
- The more Age Pension you receive, the less of your own savings you have to spend – and we all like that idea, don’t we
- This payment is supplemented than by a secure and guaranteed level of income from your investments (the best case scenario is when those two payments combined provide the income you require to meet your “modest lifestyle” – this way, no matter what happens in your life, no matter what the market is doing, even if we have the next GFC (Global Financial Crises – remember that terrible market fall in 2008 and 2009?) for some industries and some stocks it took 20 years to recover. Imagine having all your money affected by GFC at the time when you were ready to retire. Possibly the worse time to do that.
- Once you have that organised, you can breathe with content and relax knowing you will be OK no matter what, and then look at investment that will additionally support your income, while invested also to achieve some degree of capital growth. Your savings can extend the life of your income, by being partially invested into income streams, or shares or property sector, where you can see that capital growth, but you don’t rely on it, this is your “cream on the cake” kind of thing and based on your circumstances, you can either continue reinvesting it, or withdraw portion for those big presies for you grand kids or your fabulous holiday.
By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement