I finally got around to updating my sharesight portfolio tracker with my latest quarterly Investment Bond contribution transactions (processed on 17 Feb). Currently the quarterly contribution is around $1,825 each quarter, and I will continue to increase this by 125% annually until it reaches $50Kpa (which is approximately what my 'surplus' tax-free self-funded pension income will be). In the meantime I will store any 'surplus' pension income in my investment property mortgage offset account.
So far the annual ROI (after the ~30% tax paid by IB) is 8.57%pa, which seems OK. The investment allocation is fairly boring:
35% iShares Wholesale International Equity Index Fund
25% Vanguard High Growth Portfolio
20% Perpetual Geared Australian Share Fund
20% Dimensional World 70/30 Fund
I have automatic annual rebalancing in place, and the overall asset mix as at 31 Dec was:
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4 comments:
I'm probably missing something, but why not leave part of your super in accumulation phase with 15% tax rather than pay it out and put it in an investment bond that pays 30% tax?
Correct. I am only investing part of the surplus mandatory minimum required (4%) PENSION PHASE account withdrawals into the IB. The amount of my super still in accumulation phase is not being withdrawn and just compounds in the 15% tax environment. With $2M of TSB in pension phase (about $0.5M in QSuper lifetime annuity and $1.5M in SMSF pension phase account) my total tax-free pension income is around $34K + 4%x$1.5M pension phase SMSF = $94Kpa. As my expenses are only around $54Kpa, the excess $40Kpa is used to fund my IB contribution (currently around $8Kpa, and increased 125% pa) with the remainder getting stashed in my mortgage offset account.
Yes, so why did you put $2 million into pension phase?
Basically just to move as much of my TSB from accumulation phase 15%/10% income/CG tax rate into the 0% tax rate pension phase as is was allowed i.e. the $2MM TBC for this FY. It *might* have been more tax efficient to leave some more sitting in accumulation phase with the 15%/10% tax rate, but hard to work out for sure.
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