Looking for feedback or alternativ e suggestions on my planned retirement investment strategy (for myself and spouse); The strategy allow for other income sources expected to come on stream in the future for which I provide some more detail below.
The primary objective of the investment strategy is to provide a reasonably stable income in retirement which doesn’t deplete assets!
My investment strategy can be summarised as follows:
50% equities which will be held in an ARF vehicle when income is drawn down. Around €1m currently and I am assuming a sustainable dividend of 2.5% can be earned (without have to resort to needing to dispose of share). Although not that diversified by sector and stock currently, I plan to improve the level of diversification over time.
50% Dublin residential property (3 properties, approximately €1m in value and owned outright, all in good rental areas; current gross rental income 65k pa which equates to a gross yield of approximately 6.5%)
We also have defined benefit incomes of 6k pa and 12k pa kicking in 6 years and 11 years respectively.
Also should have 2 full Irish and UK state pensions kicking in around 12 years (so approximately €40 k pa from age 66/67).
Clearly, I need to look at the expenses side in detail to get comfort that enough income is being generated to cover outgo but in summary I am fairly comfortable with income once the DB pensions have kicked in and when the state pensions kick in a year or two afterwards, less so over the next 6 to 10 years
Current income level is very comfortable but both myself and spouse are keen to work less as soon as possible.
In terms of inflation I am kind of assuming that all income will broadly keep pace overtime too.
So where I’d be interested in feedback or indeed alternative suggestions is around the income being thrown off the properties and equities (in pension arrangements).
Before tax and expenses (and not allowing for rental voids etc) I am estimating this to be €90k (assuming 2.5% dividend yield on the equity component).
I suppose worth explaining some mitigants to strategy; two properties are rented to a government funded organisation and they do most of the maintenance and they return property in same condition as they took it, I’ve been renting to the same organisation for 8 years and all very smooth so far.
I have a high enough tolerance to risk and I am not a fan of fixed interest bonds unless buying in a crisis scenario
Any thoughts welcome
Thanks Cameo
The primary objective of the investment strategy is to provide a reasonably stable income in retirement which doesn’t deplete assets!
My investment strategy can be summarised as follows:
50% equities which will be held in an ARF vehicle when income is drawn down. Around €1m currently and I am assuming a sustainable dividend of 2.5% can be earned (without have to resort to needing to dispose of share). Although not that diversified by sector and stock currently, I plan to improve the level of diversification over time.
50% Dublin residential property (3 properties, approximately €1m in value and owned outright, all in good rental areas; current gross rental income 65k pa which equates to a gross yield of approximately 6.5%)
We also have defined benefit incomes of 6k pa and 12k pa kicking in 6 years and 11 years respectively.
Also should have 2 full Irish and UK state pensions kicking in around 12 years (so approximately €40 k pa from age 66/67).
Clearly, I need to look at the expenses side in detail to get comfort that enough income is being generated to cover outgo but in summary I am fairly comfortable with income once the DB pensions have kicked in and when the state pensions kick in a year or two afterwards, less so over the next 6 to 10 years
Current income level is very comfortable but both myself and spouse are keen to work less as soon as possible.
In terms of inflation I am kind of assuming that all income will broadly keep pace overtime too.
So where I’d be interested in feedback or indeed alternative suggestions is around the income being thrown off the properties and equities (in pension arrangements).
Before tax and expenses (and not allowing for rental voids etc) I am estimating this to be €90k (assuming 2.5% dividend yield on the equity component).
I suppose worth explaining some mitigants to strategy; two properties are rented to a government funded organisation and they do most of the maintenance and they return property in same condition as they took it, I’ve been renting to the same organisation for 8 years and all very smooth so far.
I have a high enough tolerance to risk and I am not a fan of fixed interest bonds unless buying in a crisis scenario
Any thoughts welcome
Thanks Cameo