{"id":6381,"date":"2017-09-26T04:00:05","date_gmt":"2017-09-26T04:00:05","guid":{"rendered":"https:\/\/amazingproperty.com.ng\/blog\/what-property-investors-really-need-to-retire-on\/"},"modified":"2017-09-26T04:00:05","modified_gmt":"2017-09-26T04:00:05","slug":"what-property-investors-really-need-to-retire-on","status":"publish","type":"post","link":"https:\/\/amazingproperty.com.ng\/blog\/what-property-investors-really-need-to-retire-on\/","title":{"rendered":"What property investors really need to retire on"},"content":{"rendered":"

<\/p>\n

\n

Many people invest in property<\/a> to create enough wealth to fund a comfortable retirement.<\/strong><\/p>\n

So just how much do you really need and how do you work that out?<\/p>\n

As with all other financial decisions, what you need will very much depend on your personal circumstances. You should always seek professional independent financial advice if you are unsure about your options.<\/p>\n

What is your number?<\/h3>\n

So exactly what is a comfortable retirement?<\/p>\n

It\u2019s how much money you think you will need to live on each year once you are no longer working, according\u00a0to realestate.com.au finance experts Bryce Holdaway and Ben Kingsley, of\u00a0<\/span>The Property Couch.<\/p>\n

So what\u2019s your number? $50,000 a year? \u00a0$80,000 a year?<\/p>\n

Remember, this number ideally doesn\u2019t include the repayments for the family home as hopefully, you will have this paid off.\u00a0 It\u2019s about how much you need to pay for things like bills, living costs or trips away.<\/p>\n

Using the rule of 25<\/h3>\n

Once you have your number you can calculate what\u2019s called the rule of 25, that is the final or total amount you are likely to need.<\/p>\n

The rule of 25 also refers your total income-producing portfolio, which means how much money is earned each year from your property investments.<\/p>\n

It could take an investor years of buying and selling properties to build up this wealth, in addition to the family home.<\/p>\n

So if your number is $50,000 your total income-producing investment assets need to be worth $1.25 million and offer<\/a> a 4% return rate:<\/p>\n

\"\"<\/p>\n

Here\u2019s how to use the rule of 25 to calculate how much you need for retirement. Picture: realestate.com.au<\/p>\n<\/div>\n

This would then generate the $50,000 a year that you\u2019d need to fund what is a comfortable retirement.<\/p>\n

Keep in mind that the 4% return rate is modest and that some years it will be higher and some years it will be lower.<\/p>\n

What if my family home is worth more than the final amount?<\/h3>\n

If you have paid off your family home but you live in it, you won\u2019t be earning any income from renting it out. But if you have an investment property or several that add up to that final amount, then you will be getting that rent as your retirement income.<\/p>\n

This is why the rule of 25 is about those property assets outside of the family home. It\u2019s about the properties you own that still generate an income.<\/p>\n

Don\u2019t sell all the assets, leave them to your heirs<\/h3>\n

The big thing to remember about the rule of 25 is that you shouldn\u2019t sell all your assets when you retire, according to Kingsley.<\/p>\n

\u201cThe rule of 25 tells us that I\u2019m also not selling down my capital to live off,\u201d he says.<\/p>\n

Don\u2019t sell everything after you leave work as selling property can be expensive and you need your assets to generate an income in retirement.<\/p>\n

Plus these income-generating assets are something you can then pass on to your heirs.<\/p>\n

\u00a0<\/p>\n

For more from The Property Couch, visit\u00a0thepropertycouch.com.au\u00a0or subscribe to The Property Couch podcast, available on iTunes or Android.<\/strong><\/em><\/h6>\n
The Property Couch provides a general opinion based on current market conditions. These opinions should not be treated as investment advice. Always obtain advice based on your individual circumstances.<\/span><\/strong><\/h6>\n

\n <\/p><\/div>\n

Realestate au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Many people invest in property to create enough wealth to fund a comfortable retirement. So just … What property investors really need to retire on<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":6382,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"jetpack_seo_schema_type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[4],"tags":[1403,12908,543,41,1152,818,645],"class_list":["post-6381","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opportunities-in-new-markets","tag-buy","tag-home","tag-home-buying-guide","tag-property","tag-property-investment","tag-real","tag-renting"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/09\/CALCULATION-STILL-1-1024x768.jpg?fit=1024%2C768&ssl=1","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":5338,"url":"https:\/\/amazingproperty.com.ng\/blog\/investing-in-property-can-help-you-retire-comfortably\/","url_meta":{"origin":6381,"position":0},"title":"Investing in property can help you retire comfortably","author":"Amazing Property","date":"July 18, 2017","format":false,"excerpt":"Did you know that the Australian Securities and Investment Commission recommends that for a \u201ccomfortable\u201d retirement, a couple will need $60,000 a year, and a single $44,000? That\u2019s a total combined superannuation of $1.24 million for a couple\u00a0or $880,000 for a single. 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Many retirees face several choices, like deciding whether to downsize, buy a second property, keep the family home, or move to a senior community. Realtor.com\u00ae recently featured some of the biggest mistakes experts say retirees most\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4849,"url":"https:\/\/amazingproperty.com.ng\/blog\/how-debt-helps-you-build-a-property-portfolio\/","url_meta":{"origin":6381,"position":2},"title":"How debt helps you build a property portfolio","author":"Amazing Property","date":"June 6, 2017","format":false,"excerpt":"[ad_1] Whilst it\u2019s possible yet difficult to save your way to a property deposit, it\u2019s almost impossible to save your way to a comfortable retirement. If you attempt to save a lump sum for an outright property purchase, you might only buy one or if you\u2019re lucky two homes over\u2026","rel":"","context":"In "Opportunities In New Markets"","block_context":{"text":"Opportunities In New Markets","link":"https:\/\/amazingproperty.com.ng\/blog\/category\/opportunities-in-new-markets\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/leverage_A-1024x768.jpg?fit=1024%2C768&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/leverage_A-1024x768.jpg?fit=1024%2C768&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/leverage_A-1024x768.jpg?fit=1024%2C768&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/amazingproperty.com.ng\/blog\/wp-content\/uploads\/2017\/06\/leverage_A-1024x768.jpg?fit=1024%2C768&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":3111,"url":"https:\/\/amazingproperty.com.ng\/blog\/investment-property-buy\/","url_meta":{"origin":6381,"position":3},"title":"Which investment property should you buy?","author":"Amazing Property","date":"April 7, 2017","format":false,"excerpt":"\u00a0 House hunting for the right investment property can be challenging. 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