(03) 9020 2905“Price check, aisle four! Price on a medium-sized tropical island, 50-room palace, 100 staff, world-class golf course, an endless supply of Bollinger and Bintang, an airstrip and a dozen watercraft? Oh, and heaps of those electric golf cart thingys.”
Could you get bored of that? Um, no. I forgot to mention the Lear jet. Just fly some new friends in. And occasionally Aerosmith.
Why shouldn’t Gen Xers aim there? We’ve still got time to make almost anything possible in our retirements.
How bad do you want it? The badder (or earlier) the retirement you want, the harder you’ve got to save/invest.
You might need around $200 million or so for the island paradise. That might be a bit of a stretch.
But Xers can still aim for a fabulously comfortable retirement.
If you want a simple target to aim at, shoot for roughly 20-25 times your desired salary, in investment and super assets. (Not including home.)
If that income is $80,000, then you need around $1.6 to $2 million in investments – inside and outside superannuation.
A 5 per cent return will produce $80,000+ a year. Any excess return needs to be reinvested to help your income keep pace with inflation. (The longer-term average for a “balanced” portfolio should be around 7.5 per cent.)
The 9 per cent Superannuation Guarantee (which is moving to 12 per cent) will only supply so much. You need to start investing outside of super, or salary sacrificing more into super.
How do you plan? You don’t. You just do it. Start putting away something extra every year. Starting … NOW!
Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and principal adviser with Castellan Financial Consulting.