» retirement https://www.bmtqs.com.au/bmt-insider Latest property and investor news Mon, 20 Oct 2025 22:43:26 +0000 en-US hourly 1 https://wordpress.org/?v=4.2.38 How much do you need to retire comfortably? https://www.bmtqs.com.au/bmt-insider/how-much-do-you-need-to-retire-comfortably/ https://www.bmtqs.com.au/bmt-insider/how-much-do-you-need-to-retire-comfortably/#comments Wed, 05 Jun 2019 02:36:37 +0000 https://www.bmtqs.com.au/bmt-insider/?p=36790 Do you see yourself driving a reasonable car, wearing nice clothes, drinking wine and holidaying at least once a year when you retire? If the answer is yes, then you’re envisioning what’s known as a ‘comfortable retirement’. According to the Retirement Standard Report released by the Association of Super Funds of Australia, a comfortable retirement enables an older, healthy retiree to be involved in a range of leisure activities and to have a good standard of living through the purchase of items like household goods and private health insurance. A comfortable retiree is also someone who owns their own home outright. So how much do you need to retire comfortably? Contents: Comfortable retirement Ensure you retire comfortably Boost your cash flow Comfortable retirement The Retirement Standard Report outlines budgets for modest and comfortable lifestyles for two separate age groups – retirees aged around 65 and retirees aged around 85. It also breaks the budgets down into singles and couples. If you’re a single retiree aged around 65, you’ll need $43,255 per year to retire comfortably or $27,646 to live modestly. If you’re aged around 85, you’ll need $41,245 per year to have a comfortable retirement or $26,186 to live modestly. Couples looking to live comfortably in retirement will need $61,061 per year if aged around 65 or $57,088 if aged around 85. To live modestly, the budgets drop to $39,848 and $37,403 respectively.  Ensure you retire comfortably There are several ways to secure a comfortable retirement. It’s important to first set realistic retirement goals and carefully plan how much money you are likely to spend each year. Assess your current savings and consider how you can save more for your retirement. Depreciation deductions can help property investors get closer to securing a comfortable retirement. Property depreciation is generally the second biggest tax deduction after interest, though it’s often missed by investors. This is because it’s a non-cash deduction, meaning you don’t have to spend money to be eligible to claim it. Any property which generates income may be eligible for thousands of dollars in depreciation deductions. Depreciation deductions fall into two categories: Capital works deductions (division 43) Plant and equipment depreciation (division 40) Capital works refers to the deductions available for the building’s structure and items considered to be permanently fixed to the property such as kitchen cupboards, doors and sinks. Residential homes in which construction commenced after 15th September 1987 and commercial properties in which construction commenced after 20th July 1982 are eligible for the capital works deductions. Plant and equipment assets refer to items which are easily removable from the property such as carpet, blinds and hot water systems. These items have a limited effective life as set by the Australian Taxation Office and can generally be depreciated over time. It’s important to be aware of restrictions to claiming depreciation on previously used plant and equipment found in second-hand residential properties. Read our BMT Insider article on plant and equipment deductions and legislation for more. By claiming depreciation, investors can reduce their taxable income and improve the costs of holding a property. The additional savings depreciation deductions provide can help investors to pay off their loan faster, pay for expenses such as regular repairs and maintenance or even help them to save to complete renovations or build their existing investment portfolio. Each of these scenarios can help an investor to improve their chances of achieving a comfortable retirement. Boost your cash flow A BMT Tax Depreciation Schedule ensures property investors don’t miss out on the hidden cash flow available for their properties. BMT found residential property investors an average depreciation claim of almost $9,000 in FY 2017/18. Reducing your taxable income by this amount in the first year alone will boost your cashflow, meaning you can save more for your retirement. Request a Quote today for a free estimate of your likely deductions or contact one of our expert staff on 1300 728 726.

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]]> https://www.bmtqs.com.au/bmt-insider/how-much-do-you-need-to-retire-comfortably/feed/ 0 Investing in property for your retirement https://www.bmtqs.com.au/bmt-insider/investing-in-property-for-your-retirement/ https://www.bmtqs.com.au/bmt-insider/investing-in-property-for-your-retirement/#comments Fri, 05 May 2017 01:07:29 +0000 http://bmt-insider.bmtqs.com.au/?p=31941 If you are investing or planning to invest in property for your retirement, there are a few things you need to consider. What’s your goal? No matter what your reason for investing in property it’s important you know exactly what your goal is. It could be to eventually live off the rent from your property portfolio, to subsidise your income, to have a nest egg for security purposes, eventually pass the property on to your kids or hold it for capital gains purposes. Be clear with your goal and have a strategy in place for how you will achieve it. Your Accountant or Financial Advisor should be able to help you define a reasonable goal and devise a strategy for how you will achieve it. How many properties do you really need? It’s the golden question, but unfortunately there is no clear cut answer that suits everyone. Once again it depends on your situation and what you hope achieve from your investment. In some cases you might get a really strong performing property or two in a growing area that works hard for you and allows you to easily reach your goals, while other investors might have a portfolio of ten and still not have the financial freedom they crave. It’s about finding balance, but don’t make the mistake of thinking that the more properties you have, the greater the rewards. You don’t want to be constantly increasing your level of debt, especially as you approach retirement. It’s better to have a number of properties you’re comfortable with and that provide you with healthy returns, and then focus on increasing their value and paying off your debts so you can further benefit when they become cash flow positive.  Is it a realistic goal to live off the rental income in retirement? When people first think about investing they imagine that once they pay off the mortgage they’ll be able to sit back and live off the rental income. Unfortunately it’s not as simple as that. There’s still going to be ongoing expenses that need to be taken into account. This might include property management fees, taxes, maintenance, repairs and other bills. Once these expenses are taken out of the rental income, it might only leave a few hundred dollars per week or less, just as example. While this is a great extra source of income, unfortunately it’s not often enough to live off alone as passive income, especially if you only have the one property. In most cases, you will need other streams to subsidise your income and complement your strategy. This might include things like superannuation and any gains from an eventual sale, which is best discussed with your Financial Advisor. What’s the best age to start investing for retirement? The earlier, the better. Property is a long term investment and the earlier you can purchase a property, the more time it will have to increase in value. This is why it’s so important to buy in an area with good capital growth in the first place. You’ll also have the advantage of seeing out a few property cycles so you’ll be able to ride out any lows and take advantage of the highs as they come around. It also takes time to build an asset base and lower your debts. The more time you have to do this, the better your investment can perform.  Furthermore you should try to avoid acquiring too much debt as you reach or head towards retirement, as you may struggle to pay it off without a constant income stream. Getting investment advice When you’re investing in property for your retirement it’s a good idea to have an advisor, or a team of advisors, who can assist you to make sure you’re on track with your strategy and getting the most from your property. This may be your Accountant, Financial Advisor or an independent Property Advisor. Your advisor can help you review your strategy and goals and adjust them at different stages of your life or the property cycle where required. They can also make sure you’re getting all the tax benefits you are entitled to as an investor – including property depreciation – to ensure you’re maximising your investment’s potential.  A specialist Quantity Surveyor can also help by making sure you claiming all the depreciation you are entitled to, which can help turn your investment into a positive cash flow asset, which is ideal if you’re investing for retirement.

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