Retirement

Open Retirement from the portfolio's menu. With a saved retirement plan, Saved retirement plan sums it up, such as Daniel Mitchell at 62 and Emma Mitchell at 60, $120,000 a year for 25 years. Edit retirement plan opens the steps. Continue and Back move between them, and Cancel leaves the saved retirement plan as it was.

1. Who retires: tick one or two people with a recorded age. For each, Retire at age and a Cash account, or Automatic selection. With two, each one's Share of household spending, which must total 100%. Then Annual household spending at retirement, for everyone in the retirement plan, and Projection years after retirement starts. The Mitchells spend $120,000 a year, half each, for 25 years.
2. Cash savings in retirement: the Expected gross bank interest rate, 4%, and a Cash reserve, $15,000, kept in each person's cash account. Where super or an SMSF is included, tick to confirm its benefits are from taxed sources and expected to be tax-free after 60. Do not confirm while a benefit is untaxed, partly untaxed or unknown. Included accounts and cash routing lists what each person draws on. For the Mitchells, that is four sources: each one's half of the Mitchell offset, and their member balances in the fund, $658,000 and $779,000.
3. Sale and wind-up assumptions: the Investment selling cost for shares, 1%, how each company's final cash is shared, whether a trust's final cash follows its beneficiary shares, and Replacement rent after the home settles, $4,000 a month. Custom property timelines and Recorded property settings follow. Section 2 explains them.
4. Economic assumptions: Income growth, Rent growth, Spending inflation, Property expense growth and SMSF expense growth, each 3%. Net super return 6.5%, Net investment return 6%, Average weekly earnings growth 3.5% and CPI change 2.5%. Watch this retirement plan sits here too.

The last step's button is Calculate and save retirement plan. It saves it and shows its outcome. The retirement plan starts when the last person retires: 1 July 2033 for the Mitchells, so their 25 years run to 30 June 2058.

The retirement plan builds strategies from your records and compares up to four.

• Keep everything keeps every asset, company, trust and SMSF.
• Sell the rentals, keep the home winds up companies, trusts and SMSFs, sells the rentals and keeps the home. A new retirement plan names it Sell investments, keep the home. It needs the people in the retirement plan to own the home directly. Otherwise the page shows Keep-home strategy unavailable.
• Sell everything, then rent winds up companies, trusts and SMSFs, sells everything, and pays the replacement rent from settlement. Household spending must exclude that rent.
• A custom timeline sets the age at which each property sells, and whose age it is. Add custom property timeline adds one. A property owned by a company or trust must sell by household retirement, and an SMSF's by the fund's age 60 wind-up.

Recorded property settings lists each property's sale dates, selling cost and main residence treatment, from its property record. For the Mitchells, every sale signs on 1 July 2033 and settles on 31 July 2033. The rentals cost 2.5% to sell, and the home 2%, with a confirmed full main-residence exemption.

Retirement outcome leads with the strategy whose cash lasts longest: its Closing net position and when Cash runs out. For the Mitchells it shows Keep everything, $32,905,348 and Never.

The answer reads "Keep everything" keeps cash to the end of the retirement plan. The other two also keep cash to the end of the retirement plan. Where a strategy runs out, the answer gives the date and how much more cash it would need over the retirement plan, its funding gap Cumulative funding gap The spending over the whole retirement plan that its cash and funding sources could not meet. .

• Closing net position is what the portfolio owns less what it owes when the retirement plan ends. It includes company, trust and SMSF positions, which are legally separate, so not all of it can be spent.
• Cash runs out Cash runs out The first day a participant's cash is below $0 after the month's top-up from their included accounts. Top-ups happen on the first of each month, so this date is always a 1st. The yearly figures at 30 June can still show cash above $0 after it. is always a 1st, the day of the monthly top-up.
• Strategy settings gives each strategy's investment selling cost and replacement rent.

Select Closing net position to open Strategy outcomes, every figure for every strategy. Cash at retirement is $2,123,645 under all three. Closing funding assets is the cash and the super and investments the retirement plan draws on, when it ends.

Keep everything ends with the least cash but the most property, $13,401,458 of closing property equity. Sell everything, then rent ends with $10,175,591 of funding assets and no property. Property equity is not retirement income explains why a large net position can still run short of cash.

Strategies compared draws each strategy's closing cash at each 30 June. Annual projection shows one strategy at a time: pick it in Strategy. Its panels are Yearly cash and tax, Cash, equity and net position, and Cash by participant. A strategy that sells adds Property sales.

Armadale's $660,000 grows 5.5% a year to the contract date. Download PDF prints every strategy. A Business account can also send it to the client.

How old the first person in the retirement plan is when cash runs out, if every asset, company, trust and SMSF is kept. It is their retirement age plus the whole years from their retirement until cash runs out, or until the retirement plan ends. Where cash runs out before retirement, the years run to the first projection year from retirement that ends with cash below $0.

The Mitchells' retirement plan is funded to age 87: Daniel retires at 62, and it runs 25 years with cash left. Funded to age shows in Since last run, and Purchase uses it to say what a purchase does to the retirement plan. Cash at retirement Cash at retirement The participants' bank and offset cash when retirement starts, keeping every property and asset. is the other measure the retirement plan is watched by.

The retirement plan starts from your records as they stand: legal owners and their ages, income, living expenses, properties with their rent, costs and sale settings, loans, cash, super and SMSF balances. It models nothing you have not recorded. Actual spending and returns may differ from the retirement plan.

Every strategy includes the estimated income tax, and the sale strategies the estimated CGT on each sale. Property tax and CGT estimates explains them. What you can reach, and when sorts super, cash and property by when a household can reach them.

The retirement plan's inputs are saved, and its results are worked out each time you open the page. If you edit it without calculating it, Retirement plan inputs changed asks you to calculate it again.

Watch this retirement plan, in step 4, has one box: Email me when the outcome moves. With it on, the saved retirement plan is run again each month. You get an email when drift Drift A move since the retirement plan was saved: funded to age by a year or more, or cash at retirement by ten percent or more. appears. Digest emails must be on in Account.

• While the retirement plan is watched, Since last run shows under the retirement plan: Retirement plan saved, Funded to age and Cash at retirement. A figure that moved also shows what it was.
• Changed since the retirement plan was saved lists the records written since, each linking to its page.

• A record the retirement plan needs shows with the action that fixes it. A person with no age reads Record an age on this legal owner first.
• A step that is not complete says what to fix, such as Household spending shares must total exactly 100%.
• Complete investment cost bases before wind-up names an investment that cannot be sold until its purchase date and full cost base are recorded.
• Select every SMSF member shows when a fund member is outside the retirement plan, as the fund cannot wind up without them.
• Remove one custom timeline shows when a retirement plan holds more than four strategies.
• If the retirement plan cannot be worked out, the page says to review the inputs and records. Review inputs goes back to step 1.