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Thursday, 27 August 2009

Retirement Savings Asset Allocation

The value of my retirement savings (superannuation) account is currently around $304,600. About $8,500 of this is sitting in my old Westpac Business Super account in order to retain my $400,000 life insurance policy (Death and Total & Permanent Disability cover), while the remainder is held within our Self-Managed Superannuation Fund in order to minimise administration and investment management fees.

Overall, the asset allocation of my retirement savings is currently as follows:
Australian Shares: 50.6%
International Shares: 34.5%
Property Securities: 9.5%
Fixed Interest & Cash: 5.4%



That's pretty much in line with my target allocation.

Many people would have a higher percentage allocated to property and fixed interest (bonds), but I already have a large percentage of my overall net worth invested directly in real estate (our home and one investment rental property), and I had decided on a long-term high growth investment strategy (including gearing) prior to the GFC, so I'll stick with that plan (it's too late to lock the barn door after the horse has bolted!)

My rate of retirement savings is currently around $25,000pa via my employer's SGL payment of 9% of salary, topped up with salary sacrifice to the maximum concessionally taxed amount. I'd like to be saving another $1,000 each month via undeducted contributions, but at the moment I'm a bit short of cash flow due to a spate of well-priced share purchase plan offers

I've really no idea how well I'm positioned for achieving comfortable self-funded retirement. It will largely depend on what average rate of return eventuates, at what age I retire, and how long I expect to live (hence the withdrawal rate I choose during 'pension phase').

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1 comment:

Retirement Savior said...

EW, for your investment portfolio projections, have you ever checked out this scenario analysis tool at WolframAlpha? The percentile graph at the bottom is really neat.

http://www.wolframalpha.com/input/?i=investment+return