Midlife Investing, Start Planning & Setting Goals

Video Transcript:

Hello, Jason Dwyer here from Dwyer Property Investments on the Sunshine Coast. Many people tend to think about their midlife in terms of a crisis, but it doesn't have to be, at least not when it comes to money. Yes, you may have spent your carefree twenties and thirties living from paycheck to paycheck, racking up credit card debt and spending wildly. By the time you've reached your forties early fifties however, chances are you've bought your own home and are in a more stable financial position. They're also your peak earning years, so it's the perfect time to start thinking about setting goals that will set you up for the future. And no, it's not too late to start investing at this stage. Even though you're at the halfway point of your working life and retirement is on the horizon, you still have a good 20 years or so to prepare for it. It's all about making smart financial decisions now.

Start Planning

If the COVID pandemic played havoc with your finances, and in particular your superannuation, planning ahead is even more important. No one wants to face the prospect of delaying their retirement, or worse, not having enough to live on so they can really enjoy their golden years. So how much is enough to retire on? I get asked that a lot, and the short answer is it depends on what kind of lifestyle you want and how much income you need to fund that lifestyle. As well as taking stock of your finances, start thinking about when do you want to retire, what kind of lifestyle do you want, and how much money do you need to fund it? The sooner you start asking these questions, the more time you'll have to put a plan in place to achieve it.

Let me use an example. A healthy, retired couples aged around 65 who owns their home leads roughly 60,000 a year to enjoy a comfortable retirement. Now that's much more than the 37,000 age pension gives you. And remember, the pension is the main source of income for most retirees, which means they can only afford a fairly modest living, just necessities and basic activities. The more comfortable budget of 60,000 would provide a better standard of living and let you buy things such as household goods, private health insurance, a reasonable car, good clothes, and the odd holiday. Even if you factor in the average super, it still may not be enough to fund the lifestyle you desire. Due to COVID, fund performance and balances are much lower than expected as well. As with personal savings, cash in the bank is actually going backwards at the moment, earning less than 1% interest, so you can't live off that. Now let's consider what you could be earning with an investment property.

The Potential Return On An Investment Property

On average property offers a 5% return, and that's on rental yield alone. Based on this healthy 5% rental return, two properties owned outright would provide you with an annual income of 50,000. Four properties would give you 100,000, and so on, exponentially increasing your retirement income. When you add capital growth, which is predicted to be as high as 20% over the next two years, it's not hard to see that investing in property on the Sunshine Coast is a smarter way to go. Compared to the age pension, superannuation, or personal savings, property can offer a secure, generous income to live off while you are retired. Now, if you didn't quite catch all those figures, I ratted off, don't worry. Just call me, Jason Dwyer, on the number on the screen and I can talk you through how to make property investment part of your retirement plan.