Author Topic: Roadmap to 60 - what do you think of my spreadsheet  (Read 1760 times)

lush

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Roadmap to 60 - what do you think of my spreadsheet
« on: May 06, 2023, 10:38:22 PM »
Hi all,

I'm hoping to receive some feedback on a spreadsheet that I've created. The purpose of the spreadsheet is to outline a 10-year financial plan that will enable me and my partner to achieve two goals:

- Provide for an early retirement by utilising our existing savings until my partner can access their tax-free super/pension account at age 60.
- Gradually transfer funds from our managed funds portfolio to our super accounts in order to have a tax-free pension.

Please note the following:

- My partner (Person 2) has essentially retired already.

- You may notice that we have allocated a significant amount of funds towards travel and living expenses. This decision was intentional, as we have been quite frugal with our savings thus far and have postponed things like holidays. Additionally, the high allocation for these expenses provides a greater level of security in the event of any unexpected life events that may arise during our early retirement.

- My approach is fairly straightforward and simple, as I found it difficult to navigate through CGT events and the like. Our main goal is to ensure that we can comfortably transition into the pension phase of our retirement.

Here is the link to the google doc/spreadsheet: https://docs.google.com/spreadsheets/d/1d2ciI_3y3rk9vetENJbHdadQZ0IaqF8xnTbQsF5vbf8/edit?usp=sharing

Thank you.

Gremlin

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Re: Roadmap to 60 - what do you think of my spreadsheet
« Reply #1 on: May 07, 2023, 07:58:29 PM »
A couple of initial thoughts...

As you look to transition your assets into super, you might want to check whether you and/or your partner are eligible to Carry-Forward Concessional contributions, and if so, how much?  You can find that from the ATO Super section in MyGov.  It might be worthwhile doing so if you can prior to your super balance hitting $500k (I'm pretty sure the carrying-forward of concessional contributions stops once your balance is more than $500k).

I think your travel budget is going to be waaaay more than you need, based on what you've previously told me you're looking to do.  I appreciate that you're thinking of this money partially as a buffer though.

From your spreadsheet:

Once your super account enters pension mode, you have to draw down a minimum amount every year (https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?anchor=Minimumannualpaymentsforsuperincomestrea#Minimumannualpaymentsforsuperincomestrea).  Note that this minimum amount was halved during the pandemic years, so it's likely to go back to 4% for 60 year olds at some point in the not too distant future.  You can draw down more if you like.  Note that 'drawing down' doesn't have to equate to 'spending it', it just means that it comes out of the tax advantaged environment.

Once you enter pension mode, you can receive your payments at a regular period.  I think this depends a bit on your super fund, but if you were with HostPlus, for example, you could receive payments fortnightly, monthly, quarterly, half-yearly or yearly.  You could possibly optimise by choosing to draw down annually at the end of the financial year and then use that money for the upcoming year, but that seems like hard work for only a small amount of upside to me.  Mrs G and I are going to draw down monthly from our accounts when the time comes.

You should be able to claim a tax deduction for any personal concessional contributions.  And you will have a bit of tax to pay between your IP, your Vanguard distributions and any CGT as you sell down your Vanguard fund.

Don't know much about insurance bonds.

lush

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Re: Roadmap to 60 - what do you think of my spreadsheet
« Reply #2 on: May 12, 2023, 12:16:11 AM »
Thanks Gremlin. Some decent points for me to take into consideration - appreciate you took the time to review!

Gremlin

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Re: Roadmap to 60 - what do you think of my spreadsheet
« Reply #3 on: May 12, 2023, 12:53:58 AM »
As an aside, thinking through your questions made me realise a couple of things.

My own super balance has ticked over from just under $500k to over $500k since 30 June last year.  AND I have a stack of unused Carry-Forward Concessional contributions of my own, which I'll lose if I don't action by 30 June this year.  AND I've got an unusually high tax liability this financial year due to some lumpy capital gains, which means I could benefit from a tax deduction, such as one from making concessional contributions.  AND that money is burning a hole in my back pocket.

So I appreciate you spurring me into action!

Rodstar

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Re: Roadmap to 60 - what do you think of my spreadsheet
« Reply #4 on: September 09, 2023, 07:02:01 PM »
How much do you currently have in super?  My age, goals and circumstances seem somewhat similar to yours.