Learn how much you need to invest now if you want to retire on property

The latest Association of Superannuation Funds of Australia research shows that, in general, a couple looking to achieve a comfortable retirement needs to spend $57,195 a year, while those seeking a ‘modest’ retirement lifestyle need to spend $33,120 a year which means that the average couple need a lump sum of about $660,000 to survive for about 20 years in retirement.

“The quality of retirement directly depends on how much money people have,” ASFA chief executive Pauline Vamos said.

“People need to look at all their assets ranging from investment properties to the pension.”

How much exactly you need to invest now if you want to retire on property?!

Investment Property Calculator has developed a free Retire on Investment Rental Property Calculator in Excel for people who plan to retire on properties. You can download the calculator here.

With this calculator, you can estimate what you need to invest for Modest lifestyle – single, Modest lifestyle – couple, Comfortable lifestyle – single, and Comfortable lifestyle – couple.

Here is an example from the calculator.

Modest lifestyle – single Modest lifestyle – couple Comfortable lifestyle – single Comfortable lifestyle – couple
Annual income needed * $23,032 $33,120 $41,830 $57,195
What you need to invest now
Property expenses per year $6,910 $9,936 $12,549 $17,159
Average income tax rate 9.95% 17.88% 21.91% 26.64%
Rent per year $33,251 $52,432 $69,633 $101,352
Rental yield 5.50% 5.50% 5.50% 5.50%
Property value $604,566 $953,301 $1,266,059 $1,842,763
Property appreciation per year 5.00% 5.00% 5.00% 5.00%
Retire in years 20 20 20 20
Property value to invest now $227,855 $359,289 $477,164 $694,518
Mortgage $182,284 $287,431 $381,731 $555,614
Mortgage interest rate 6.00% 6.00% 6.00% 6.00%
Mortgage term 20 20 20 20
Total mortgage repayment $313,425 $494,219 $656,362 $955,343
Total interest repayment $131,141 $206,788 $274,631 $399,728

Download the Retire on Investment Rental Property Calculator now!

All the Annual income needed information is from The Association of Superannuation Funds of Australia and can be found through this link.

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