Retirement Strategies 15 June 2010

Hello - I'm Bernard Kelly, Australia's Retirement Strategiest

TODAY'S INSPIRATIONAL QUOTE:

"Our lives improve only when we take chances -- and the first and most difficult risk we can take is to be honest with ourselves."

Walter Anderson (American Football Referee, Superbowl XXXV)


CONTRIBUTING TO SUPER UNTIL WE’RE 75

In the fine print that accompanied the Rudd Government’s release of the Henry Report was the mention that employees will now be required to make compulsory contributions to superannuation until age 75.

Previously, relief came when employees reached age 70.

The implication is that the government is anticipating that many of us will be working into our 70s.

The good news is of course that you can still commence a portfolio of residential investment properties in your early 60s.


PREPARE TO WORK UNTIL YOU’RE OLD


John Beard, an Australian now working in Geneva as Director of Aging and Life Progression at the World Health Organisation, expects that governments will soon be encouraging firms to retain employees well into old age as a means to limit expenditure on hospitals and aged care facilities.

It is well documented that an active lifestyle reduces the need for medical expenses and hospital stays.

Of course, firms will also benefit from retaining their knowledge base, as well as not having to compete for (increasingly scarce) younger employees.

Already, some firms in the United States are now offering 1000 hour years to older employees. This is 55% of the hours that firms expect from younger employees, and can be taken in various packages for example over seven months or three days a week for 45 weeks.


THE NEW RETIREMENT LIFESTYLE

Your retirement will be impacted by your finances, your health, and the health of your spouse.
Assuming those fundamentals are met, here are few ways to stay active and enrich ones life after retirement. Staying active and engaged with life is an important way of adjusting to the retirement years.

Physical activity

The best way to be healthy, independent and occupied is by doing some minor physical exercise such as walking and yoga. You should participate in exercises daily such as walking wherever possible and taking the stairs instead of an elevator.

Gardening

Gardening is a great way to stay active and it is a big stress reducer. An added benefit – in addition to friendships that emerge from common interests - is being able to eat the vegetables that you grow and to give extra produce to friends and family.

Spend time with grandkids

If your grandkids are busy with homework and you have some time on your hands, why not help them with their work? Apart from homework, you can play with them, tell them stories, and take them to the park. Thus you will gain a good listener and even build a healthy relationship.

Travel

Explore Australia. Remember there is no age limit to having fun and adventure. This is the time of your life so make the best use of it. Discover new and exciting things about the world around you.

Or establish an Elderhostel where there is a strong marketplace – such as on the gem and sapphire fields in Queensland.

Volunteer

Be a volunteer in a hospital; of join a club or church group that does overseas mission work. Find out where interests are and use your skills and abilities to better the world. Making a difference in the lives of others can be very rewarding.

Career skills and teaching

Working in a job for 30 or 40 years has taught the retiree many valuable skills and knowledge that can be shared with others in the education of the youth. There is a tremendous need for experienced people from the work world to teach the workers of tomorrow and to give them experience from real life situations. There are paid jobs in the TAFE system and unpaid jobs at your local community house.

Write

Write about life experiences. There is much knowledge and wisdom that seniors have to offer to the younger generation. Many well known writers did not start writing until their later years. Maybe you will write a famous novel. How will you know unless you try? And it’s easy to sell your writings on http://www.clickbank.com/

Life Long Learning

Take a college coarse to improve your knowledge and skills sets. Then use this new knowledge to enrich your life and those around you. You may want to learn to paint, sing or dance.
Whatever you want in retirement you now have time to pursue your interests. Make this time the time of you life.

Source: Ed Heigl executive director Crestview Senior Living writing in the “St Louis Globe-Democrat” 7 April 2010

I’M LOOKING FOR REFERRALS

“We are grateful that, one day, you will be using our services.

“If we prove to be exceptional, would you refer us to three of your contacts?”

I’m Bernard Kelly 0414 778 518
Australia's Retirement Strategiest™


WHAT RETIREMENT CALCULATORS DON’T TELL YOU

When you search on the phrase “retirement calculator” using Google, and you’ll be deluged with hits. Every major financial services company has an online tool to estimate how much money you need to save for retirement. But a recent study by the (American) Society of Actuaries says many popular calculators have serious flaws. These potential hazards could lead to serious miscalculations when you’re plotting your financial future.

The free online tools, as a group, had a host of problems. “These tools take a project that is fairly complex and boil it down to something simple,” says John Turner, an economist and co-author of the report. “They don’t ask you to consider a lot of important variables.”

Here are some areas where retirement calculators may be getting it wrong.

1. Pension Projections

Most retirees get the bulk of their retirement income from the government and many of the calculators annual cost-of-living adjustment (COLA), which is pegged to the Consumer Price Index.

However this adjustment is often less than the inflation rate.

2. Rate-of-Return Assumptions

Most calculators assume that you will only have superannuation – but what if you have some investments as cash in the bank? And what if the stock market surges – and then falls precipitously?

Most calculators assume a straight line rate of return forever.

3. Life Expectancy

It’s impossible to know how long you’ll live, of course. Based on average life expectancies, 65-year-old men can expect to live another 17 years, and women another 20 years.

However for a man aged 65, the probability of reaching age 90 is around one third, and for a woman aged 65, her probability of reaching age 90 is around half.

4. Housing Info

When forecasting your finances in retirement, make your best guess about how much you’ll be paying for a mortgage or rent, whether you’ll tap your home equity and any income you might receive from selling your home.

However most calculators don’t provide these options.

5. Inflation Forecasts

When it came to inflation, stick with retirement calculators allowing you to input alternative inflation scenarios, and run the numbers in a couple of ways. You never know.

6. Spouses

If you’re married, calculate retirement income needs for you and your spouse together and separately, using different life expectancy scenarios. This will help ensure that the one who lives longer won’t run out of cash. “Doing the ‘what-ifs’ can help you see just how differently things can turn out,” says Turner.

7. Hospital and Medical Expenses.

As we age, our bodies deteriorate. Most calculators ignore this financial impact of this reality.


Acknowledgements Mark Miller, appearing on CBS' Moneywatch.com

THE TOP FIVE RETIREMENT MYTHS:

1. You'll only need 70-80 percent of your pre-retirement income.

Hopefully the kids have left home and you don’t have a mortgage on your family home. But even if you’re in the 50% who fit this scenario, other expenses can take their place, such as travel – initially – and then later health and medical expenses.

2. When you retire, you'll be in a lower tax bracket.

Maybe, and maybe not. When one third of the population is retired, my prediction is that the government will need to find other ways to put their hands into our pockets.

3. You can always just keep working.

This presumes that your body doesn’t wear out and also that the job market for seniors remains healthy.

4. The stock market will save you.

The stock market does go up over time, but it can also dip and adversely impact on your superannuation

5 There's always the pension

There will always be a pension – for only for those who would otherwise be destitute.

But in future the government won’t be able to pay everyone the pension, so if you’ve had a good education, they might say, at some stage, “well, you many opportunities to look after yourself”. So don’t rely on big brother being there for you.

Acknowledgements - Beth Flynn: VP, Retirement and Client Experience Charles Schwab & Co., Inc.

HOW TO FIND WORK AFTER 50

I saw recently a review of “The Return of the Boomers” written by François Humbert, published in France by Maxima.

The one solid suggestion that I saw was to look for employment with SMEs (Small & Medium Enterprises) which are too small to have a Human Resources department.

The boss is typically busy, and hiring is just another hassle for him. So the easy route for him is to look for competent people who can make a contribution immediately.

PROFITABLE HOBBY

I was reminded recently that if you have some basic product knowledge (whatever product you are familiar with), an empty garage, a basic website and hey presto you too can have a profitable hobby.

I had to buy some rope – for ten year old girls to use as a skipping rope at our street party.

So I found a rope shop on the internet, and the owner obviously knew a lot more about rope that I did, so I said I’d take his recommendation and where should I come and collect it?

The address of his shop was in fact, his double garage, and in conversation he mentioned that many people could do what he’s doing. For example, he said, anyone who has been in the Boy Scouts, anyone who has done rock climbing, anyone who has been a truckie, anyone who has ever been sailing. If you have some base knowledge of rope, he said, you can readily build on that.

Incidentally I was interested to learn that the big market for rope apparently is in industry and mining – in fact anywhere they used to use wire cables. Modern rope is made from chemicals, and is stronger than wire cables, but more importantly, it will not whiplash should it break - so it’s far safer.

But back to your profitable hobby: all you need is some basic product knowledge (whatever product you are familiar with), your empty garage, a basic website and hey presto you too will have a profitable hobby.

If you need a low cost, but fully functional, website, go to my other site www.valuewebsites.info (This online store services my private clients who need a low cost, but fully functional website for their profitable hobby.)


PAY FOR A CONSULTATION

Some people want to pay me for this service.

Feel free to go to my membership site www.retirementstrategies.net.au and pay $110 for a full membership

HOST A WORKPLACE SEMINAR

You probably know many people who need my experience and expertise right now.

Here’s the deal – you invite a few people to a lunch or after-work seminar, and I’ll present Retirement Strategies for Employees.

I’ll pay you $150 for your expenses, and a further $1000 for every participant who has me share an investment property with them.

About Bernard Kelly:

Bernard Kelly BEcon MBA CRPC Australia’s Retirement Strategist, is a highly sought-after advisor, retirement authority, thought-leader, author and radio commentator because he makes the complicated and mundane topics of investing and retirement fun! Bernard has over 20 years experience providing families with financial thought. He is the author of Live Your Dreams in Retirement, Property Investing for Couples, Goolwa by Breakfast and Raising Decent Kids into Substantial Wealth and publishes a fortnightly newsletter that reaches thousands of subscribers worldwide.

19 Prospect Street, Box Hill 3128 Australia. Tel 61-3-9899 8577 mobile 0414 778 518

* note that I am not a Financial Planner. These comments are only general expectations of what may happen to property in the years ahead. However, unlike Financial Planners, I do offer a Fiducary Relationship to my private clients.

Lifestyle Newsletter 15 May 2009

PROFITABLE HOBBY – BECOME A WEBHOST

My friend CH retired nine years ago, after a career as a solicitor.

After two years he had become bored, but had started to go to computer swap meets, held on Sundays in a local hall, really only to fill in the day. He had really no knowledge of computers before that (but he did have a logical mind).

It gradually dawned on him that every website had to be “hosted” and realised it was a fairly easy to establish one himself – for his own hobby websites and for a few friends.

Not needing an income, he priced his services very low, and selected a name that would reflect this pricing, and found he was attracting clients who needed to host multiple sites.

Now – after only seven years – he has 7,000 clients but because everything is automated, it’s still a one person “hobby”.

But you do the maths. If each client pays him say $100 pa, that’s a lot of revenue for a one person hobby with little overheads.

His URL is www.budgethost.co.nz

WHY PENSION AGE IS BEING LIFTED TO 67

The pension age in Australia is being progressively lifted to 67.

While no detailed rationale is widely available, an annual report published by the US government in May shows what could happen there.

Because of the increasing cost of medical procedures and an aging population, it has warned that the American health insurance plan for the elderly (known as Medicare) will be insolvent by 2017 - two years earlier than predicted in 2008.

A separate fund for Social Security, their government’s pension plan, will be exhausted by 2037 - four years earlier than reported last year.

The demographics in Australia are broadly similar. Which is why we all need to tuck something extra aside come close to 20-25 years of dignified retirement.

Let me know if I can help you explore your options. My email is

admin@retirelaughing.com

RETIREMENT TAKES A LOT OF MONEY

AARP has just released a retirement planning video “Mission Retirement” to show Americans the importance of saving for the future.

Just about everyone’s mission is to retire comfortably some day. It isn’t impossible, but it will take work.

According to AARP, there are big holes in the security net of government welfare, therefore, it’s everyone’s responsibility to start early. In fact, the video mentions that to have an adequate nest egg you need to save 15% of your income each year for 40 years!

Go to www.aarp.org/finance

RETIREMENT OFTEN HAPPENS UNEXPECTEDLY

Retrenchment, a health problem, or the illness of a relative can derail

retirement plans in an instant.

This new survey of 1,200 adults between ages 40 and 79 found that the number of seniors who need or want to work during the traditional retirement years is rapidly growing, AARP Financial Inc. and Boston Research Group found.

About 433,000 unemployed Americans age 65 and older were actively seeking employment in February, more than twice as many as in November 2007, just before the recession began.

“This is a daunting economy for older people. A lot of older people are coming to see us that are scared or bewildered,” says Cynthia Metzler, president and CEO of Experience Works, a nonprofit organization that helps older people retrain for new jobs. “We have people who are in their 80s who are taking on new jobs.”

If you want me to help you explore your options – now – to enjoy your eventual retirement, contact me Bernard Kelly anytime. My email is admin@retirelaughing.com

RETIREMENT IQ TEST

The formula for a financially successful retirement used to be straightforward: Work for decades for one employer and then live happily ever after on the pension and whatever personal savings you were able to amass.

So the amount of savings was important but not critical.

Today, with superannuation vanishing and an economic crisis withering savings, it’s increasingly up to individuals to take charge of their finances to fund retirements that can stretch for up to 30 years because of longer lifespans.

Is your retirement IQ up to the challenge?

Take the test and find out. (Answers at bottom):

1. What percentage of your savings can you withdraw annually in retirement without risk of running out of money?
(a) 3 percent (b) 4 percent (c) 7 percent (d) 10 percent

2. Approximately what percentage of pre-retirement income is generally needed to maintain a person’s current lifestyle in retirement?
(a) 45 to 60 percent (b) 60 to 75 percent (c) 75 to 99 percent (d) 100 percent or more

3. Working full-time for three years past one’s anticipated retirement date and continuing to save 15 percent of salary could raise annual retirement income by how much?
(a) 7 percent (b) 12 percent (c) 17 percent (d) 22 percent

4. At what age will most of today’s workers be eligible for full pension retirement benefits?
(a) 62 or 63 (b) 64 or 65 (c) 66 or 67 (d) 70

5. What is the amount in a superannuation fund for the typical person aged 60 retiring today
(a) $87,000 (b) $147,000 (c) $247,000

6. The number of workers age 65 and over is expected to grow by how much over the next decade?
(a) More than 20 percent (b) More than 40 percent (c) More than 60 percent (d) More than 80 percent

7. What percent of homeowners age 50 to 65 plan to use home equity to finance ordinary living expenses in retirement?
(a) 6 percent (b) 10 percent (c) 20 percent (d) 50 percent

8. A job retrenchment in one’s 50s or 60s typically reduces total household wealth by what percent?
(a) 11 percent for married couples and 23 percent for single people (b) 16 percent for married couples and 28 percent for single people (c) 21 percent for married couples and 33 percent for single people (d) 31 percent for married couples and 43 percent for single people
___
ANSWERS:
1. (b)
2. probably (c) as it’s best to plan for the high side since health and medical costs are impossible to predict.
3. (d)
4. (b) if you retire today but it will soon be (c)
5. (a)
6. (d)
7. (a)
8. (c)

Acknowledgements: Star-Telegram.com 6 April 2009

Product Newsletter 1 May 2009

The beauty of property investing is that if this house has a market value today of say $400,000, you can reasonably expect that this value should double in 7-10 years. And if it only costs an investor $10,000 out-of-pocket, then the payoff is $390,000. Yippee!

FIXED INTEREST RATES MOVING UP

The bottom of the interest rate cycle has been reached.

While the cash rates are still expected to drop slightly over the next few months, the banks commenced the rise in fixed rates loans in the week ending Friday 24 April.

If you still haven’t locked in your facilities, don’t delay any longer.


INVESTORS’ CLUB - 14% OF TAXPAYERS


The Australian Taxation Office, in its report Taxation Statistics 2006-07, says that 13.6% of personal taxpayers own an investment property

So you are a member of an exclusive club, and investors collectively own one third of all housing accommodation.

There are 11.8 million taxpayers, so the membership of your club totals 1,600,000.

However many investors are just starting out, as only 17.5% of club members own more that one investment property.


RETIREMENT CONFIDENCE AT ALL TIME LOW

In the USA, workers and retirees have simply lost confidence in their ability to either fund a comfortable retirement or enjoy a financially secure retirement, according to the Employee Benefit Research Institute's 19th annual retirement confidence survey released in April.

Only 13% of those in work say they are "very confident" about having enough money for retirement, according to the survey. That's the lowest response since 1993, and half of the 27% response in 2007 -- just two years ago.

And almost half - 44% of all employees - are either "not at all" or "not too" confident about having a secure retirement.

Of those already retired, only 20% are very confident about having a financially secure retirement.

If you want help to explore options to avoid this nasty situation, contact me – Bernard Kelly – anytime. My email is admin@retirelaughing.com


HOUSING IS RESILIENT

Here are three paragraphs in a recent speech by Rory Robertson (Macquarie Bank's interest rate strategist) that might surprise you:"Between June 1990 and June 1992, full-time employment fell by 7%, and then took a full three years to get back to where it started. So, how far did home prices fall?

Actually, they didn't. Average house prices across Australia's state capitals rose - not fell - by about 2% per annum in nominal terms as that early-1990s recession and jobs disaster unfolded."It turns out that the downward pressure on home prices from shrinking employment in the early-1990s recession was more than offset by upward pressure on home prices from the halving of mortgage rates, from a record 17% in 1989 to 8.75% in 2003."I have no idea if average Australian house prices will fall somewhat or rise over the next five years.

“But those with their eyes wide open can see that sharply lower mortgage rates this time around - lower than most Australian home buyers ever dared to dream - already are having a strongly supportive effect on housing markets."

If you would like me – Bernard Kelly - to help you explore options to provide for your retirement via an investment property portfolio, contact me anytime. My email is admin@retirelaughing.com

Lifestyle Issue 15 February 2009

WHAT YOU’LL NEED IN RETIREMENT

The pension is now $24,481 for a couple. And we all know what a wonderful lifestyle the pension can provide!

The Australian Association of Superannuation Funds and Westpac have just released their research showing that a couple – as at September 2008 – would need $50,561 (after tax) for a comfortable lifestyle in retirement.

On a 5% yield, you’ll need $1,000,000 in investment assets (excluding your family home) to generate an income of $50,000. If you think that you’ll need $65,000 before tax, you’ll need assets of $1,300,000

If you don’t have at least $1,000,000 in inflation protected assets, just hit the reply key to this email and talk to me – Bernard Kelly. At least I’ll be able to help you explore your options.



AUSTRALIAN HOUSING WILL EXCEL: IMF

The International Monetary Fund has confidence that the Australian housing market will “fare much better than other countries” and that the “fundamental drivers” of house prices is “strong immigration flows, and the other is the interest rate.”

From the Sydney Morning Herald 2 February 2009 (“Australian housing a survivor on the world stage”)


THE BENEFITS OF RETIRING LATER

Deferring the drawdown of retirement assets by just four years increases a person’s eventual monthly income – for life – by 33 percent, says Steven Sass, coauthor of Working Longer: The Solution to the Retirement Income Challenge (Brookings Institution Press, 2008).

And an eight year delay can produce a 75 percent monthly bonus, he says.

Many people actually want to work longer than their parents did, and even longer than they expected, for the continued social engagement and connection as well as the continued income.

Even more promising, a slew of surveys show that as many as half of all baby boomers want to “give back” in their encore careers, in schools, community organizations, environmental efforts, and troubled spots at home and abroad.

These major structural changes in working lives have been building for decades; the economic crisis, which has wrecked many retirement plans, is accelerating this shift and increasing its urgency.

Acknowlegments: encore.org

I'm Bernard Kelly

http://www.retirelaughing.com/

MANY SENIORS PLAN TO START A BUSINESS

In France, an association of seniors reported on the results of two surveys of respondents age 50+ years and their attitude to starting a business.

The first is a quantitative survey conducted by the institute IFoP

The second was more qualitative in its approach.

Both studies show that almost one fifth of the population in their 50s plan to engage in entrepreneurship.

Eighteen percent of the 50-64 cohort plan to create a business.

Among these entrepreneurs, 38% have a specific project and are 63% say they want to establish a business within two years.

PROFITABLE HOBBY – DISTILLING SNAPPS

In 1992, Michael and Alla Ward moved from Tasmania for a change of climate and lifestyle.

They found a property on Tamborine Mountain, Queensland.

This property had abundant fruit trees, but found that they had too much fruit for a four person family.

With all this fruit, Alla began using her grandmother’s recipes to brew distinct flavoured snapps as a hobby.

This hobby has now blossomed into the Tamborine Mountain Distillery.

For a continuing flow of detailed case studies, go to our membership site: www.hobbiesforprofit.com


PROFITABLE HOBBY – TEE SHIRTS

This is a profitable hobby that you can operate from your garage, and take the product to weekend markets.

The key to success with this venture is appealing logos on the tee-shirts, and a bold pricing strategy.

I’m told that two appealing logos are – for toddlers “Give Peas A Chance” and for middle aged males “I Have My Faults, But Being Wrong Isn’t One Of Them”.


For a continuing flow of detailed case studies, go to our membership site: www.hobbiesforprofit.com

Lifestyle Newsletter 15 January 2009

PROFITABLE HOBBY – SECOND HAND BOOK STALL

Anyone can easily run a second hand book stall at weekend markets.

You source the books you have for sale from charity shops.

You’d buy them for $1 then sell them for $5. A simple fold-away table is all you’ll need initially for your stall.

Your major expense is the $25 fee that you have to pay to each market, each week, for your space.

In four hours, you should be able to sell at least 20 books (revenue $100).

Your expenses for the day would be $20 for stock, and the $25 fee. Profit $55.

Over a year, your profits would be north of $3000.

Refer a Friend – Family, friends and work colleagues can benefit from a continuing flow of detailed case studies after you visit our membership site: www.hobbiesforprofit.com

PROFITABLE HOBBY – RECRUITMENT AGENCY FOR SENIORS

Mary was a qualified nurse, aged 60.

However at her age, there are personal injury risks in that profession so hospitals tend not to hire seniors.

She needed income, and took on some part-time low paid work (from the local council) supporting the elderly in their own homes.

However she needed extra income and it occurred to her that she had ample time to start a hobby business.

Given her own experience, she realised that there must be a population of seniors out there who become “un-employable” at a certain age.

So she resolved to establish a recruitment agency for seniors, working from home with virtually nothing more than a computer.

Fortunately Mary had personality, and went out of her way to promote herself in newspapers that were read by seniors.

She also became passionate that firms could benefit from hiring experience, which helped her promote her hobby business.

Her fees were $25 per annum to be listed on her database, and $300 for a firm to look for suitable employees.

After the first year, she had over 300 seniors registered (revenue $7,500) and 15 employers had paid to look (that was an additional $4,500).

The key ingredients for this hobby to become profitable would be an abundance of personality, and loads of energy.

You would also need to find a large employer who was willing to employ seniors, otherwise you’d have an ethical problem with taking money from registrants without a genuine expectation of being able to match them up. But retail chains could become a major client, as they are often happy to employ seniors in shifts that students don't want.

Refer a Friend – Family, friends and work colleagues can benefit from a continuing flow of detailed case studies after you visit our membership site: http://www.hobbiesforprofit.com/

POLITICIANS ACKNOWEDGE: SUPER IS INADEQUATE

Politicians have finally acknowledged what most of us have known for some time – it will not be possible for superannuation to provide us with an adequate income for 20-25 years of dignified retirement for the vast majority of us.

Which is why I have been urging my private clients to build a portfolio of investment properties.

When the Australian Government announced the review of Australia's tax system in May 2008, the review was to look solely at the current tax system and make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century.

This study – the Henry Review – was to consider (among other topics) the tax benefits afforded to superannuation, but now the terms of reference have been amended to provide for consideration of the adequacy of existing superannuation arrangements.

Of course the Association of Superannuation Funds of Australia have long advocated that the employer contributions should be 15%, and the major wealth management company AMP now believes that a target for “adequacy” is 65% of an individual’s pre-retirement living standards.

COTA Over 50s – reflecting the less affluent socio-economics of its membership base - has long advocated a retirement incomes system based on the actual cost of living in modest circumstances commensurate with contemporary Australian standards. A pension of 35% of male total average weekly earnings seems a good place to start, they say.

However none of these institutions have the solution to outliving our wealth, and inflation-protecting our income in retirement.

Which is why investment properties are so attractive.

If you would like me to help you explore your options, feel free to contact me – Bernard Kelly – anytime on admin@retirelaughing.com


YOU’LL HAVE TO KEEP WORKING


When the aged pension was introduced in 1909, you had to be 65 to qualify – as you do now.

However back then only 5% of the population was aged over 65; today 5% of the population is aged over 85.

Effectively healthier lifestyles and advances in medical science now allow us to live 20 years longer.

But the government can’t afford to pay us all the pension, hence the push to have us fund our own retirement by drawing an allocated pension off our superannuation savings.

However the reality is that, for most of us, super will never be enough.

For an explanation, let’s look at the “Ten Ways to $1,000,000” article in the Financial Review Smart Investor magazine of April 2008.

The No.1 strategy was for a 21 year old (who already had savings of $10,000) to contribute $5,000 every year extra i.e. above the employer’s 9% contribution, until age 65.

The result – “he’ll be a super millionaire by age 70” concludes the article. But there’s no mention of what that $1,000,000 will buy in 50 years time.

It goes without saying that their other nine strategies produced inferior results – so what’s the hope for us who are well advanced in our careers?

Superannuation is not the answer if you’re looking for 20-25 years of dignified retirement, but a portfolio of investment properties is.

This strategy works best if you’re still in the workforce, so that when you retire, you eat your super before touching your investment properties.

So you’ll have to keep working while you put that investment property portfolio in place.

If you would like me to help you explore your options, contact me – Bernard Kelly – anytime at admin@retirelaughing.com