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Wednesday, 30 April 2008

Goals progress and changes

I've added a new 'long term' goal to the graphic in the RH margin - it shows how close I am to fully funding my desired retirement income solely from the money socked away in my retirement fund (SMSF). I've set the goal at a fairly modest 65% of my current pre-tax salary, the rationale being that

a) the pension paid out of my SMSF will be tax free (under the current "Simpler Super" regime),

b) I currently use up a large part of my salary on expenses that won't exist during retirement [eg. retirement savings (at least 13% via salary sacrifice), daily commute (2%), income tax (at least 10%), mortgage, children... - hey, I looks like I won't need any money in retirement ;)],

c) I'll also have my other investments to draw on for any large one-off expenses, unexpected health costs etc. (although I'm not planning on consuming my investment portfolio during retirement if I can help it).

The calculation also assumes that I can withdraw a pension from my SMSF at the rate of 5% of the total value each year without reducing it's real capital (this assumes a tax-free 8% long term ROI and 3% inflation rate). This gives me a target in current dollars to which I can compare my current SMSF balance. Using this target amount and the currect balance of my SMSF I get a figure of 27%.

This month I've "written off" around 1/4 of my education goal for 2008, as I've fallen behind in my MIT course work this semester and decided to take a leave of absence for next semester, when we'll be away on holiday overseas for more than a month. I'm still hoping to complete the course work for my BTeach and DFS(FP) enrollments, but at the moment I'm struggling to find the time to get on top of things.

My investment goal for 2008 is still looking unattainable after a poor 1st quarter, and my weight loss is progressing much slower than I'd intended (at least it's still heading in the right direction).

I won't be moving the "goal posts" though, as I still want to try to get as close to my original targets as possible on the annual goals, even if I don't quite make 100%.

Copyright Enough Wealth 2008

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