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What's your retirement asset allocation percentages?

Discussion in 'Medium/Long Term Investing' started by Zaxon, Oct 26, 2019.

  1. aus_trader

    aus_trader

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    One of the retirees being a widower did move into a unit after selling the family home.

    Another couple I know of moved into a smaller home with less bedrooms and still got to unlock the sizeable equity that was tied up with their much larger family home that their kids (now all adults with their own families) grew up in.

    So I suppose in each case, the remainder of the proceeds from the downsizing move is added to AUM.
     
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  2. qldfrog

    qldfrog

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    Slightly off topic:
    Is there a way to buy US treasury bonds aka etf on the asx?
    I know how to own some on the NYSE, and i do, but has anyone found a way on the asx?
     
  3. sptrawler

    sptrawler

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    The problem is, life throws curved balls, especially when it comes to health and family
     
  4. aus_trader

    aus_trader

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    And in the case of the widower I was talking about, it wasn't a question of choice as she had most of her wealth tied up in the family home. So to live comfortably with sufficient money she had to downsize and invest the remaining proceeds of the sale to live off... in her golden years.
     
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  5. aus_trader

    aus_trader

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    Can't find any ETF's of that, which can be traded on ASX. Only international one that comes close is Vanguard International Fixed Interest Index (Hedged): (VIF). Here is the description:

    "Exposure to high-quality, income-generating securities issued by governments from around the world, hedged to Australian dollars to reduce fluctuations."
     
  6. qldfrog

    qldfrog

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    Thanks, that is the state of my searches...why?
    And VIF is edged..
    I want US bond, treasury ones, unedged....
    Have to stick with pershing/comsec
    A shame
     
  7. aus_trader

    aus_trader

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    Yes, I think we are limited to the choices we have here in Australia. However the landscape has improved quite a bit in terms of variety compared to when ETF's were first introduced.
     
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  8. qldfrog

    qldfrog

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    I agree but would have thought that an ETF for raw unedged US treasury bonds would exists, it is a key investment worldwide even for governments..
    But yes government do not need ETF nor the 1%
     
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  9. aus_trader

    aus_trader

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    Same here, I think the unhedged version is one of the assets that investors flock onto in times of uncertainty and should be available on the asx as a plain vanilla ETF. The hedged version introduces an additional layer of complexity because investors have to try and predict what the AUD/USD will do as well.
     
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  10. Sharkman

    Sharkman

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    bit of a late followup to the point i made earlier in this thread regarding why i prefer investing in international equities over local. maybe this doesn't really belong in this thread anymore, but when i wrote the above, i didn't have any actual data, it was just an impression i had. however, i did come across a concept today that does somewhat quantify it - the economic complexity index.

    https://ourworldindata.org/how-and-why-econ-complexity
    https://oec.world/en/rankings/country/eci/

    from what i understood of it, it looks at both diversity of products an economy produces and how complex those products are to produce. its researchers argue that this is a fairly accurate predictor of long term economic growth.

    presumably because of our heavy reliance on mining and agriculture, we are ranked no. 59 - below just about every other advanced nation (even NZ and Canada, which are supposed to be fairly similar to us economically), and quite a few developing ones. whereas the US is at no. 7 and the top 3 - Japan, Switzerland and Germany - are significant components of all-world ex-US indexes.

    we still have a relatively high per capita GDP despite this, as can be seen on the last dot plot of the first article. the immediate conclusion would be that we're still enjoying the wealth provided by the mining boom, and our politicians have been asleep at the wheel because of the headline numbers that has provided.

    has it been papering over the flaws in the economy in that as a whole, it doesn't produce particularly sophisticated products? so as the benefits of the mining boom fade away over time, per capita GDP will struggle to increase? that appears to be getting borne out by the sluggish wage growth we've been seeing over the past few years as that sugar hit faded.

    maybe i'm looking at this a bit superficially, only just read about it so haven't really digested it too much yet. but so far it's only solidified previous thinking that weighting towards international ETFs is the right strategy for me. is it possible for us to keep going the way we are now and realistically expect economic prosperity if we don't get another mining boom to use as a crutch? or are we doomed to stagnate over the course of a few decades and watch other nations overtake us, as the study appears to be projecting?

    interested to hear what others think, particularly those who disagree with the study, there might be fallacies in it that i've overlooked.
     
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  11. qldfrog

    qldfrog

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    Agree on the general economy, and so i i wou be wary of etf wide indexes in Australia
    After the crash we need to have, and pray we have one, we will be among the few western countries with a positive age curve for consumption, so in the next 30y or so building, consumption and general gdp should keep growing, but that is not a given win in term of share market
    See Brazil, Argentina or Chile in the last 40y...
    Add economic mismanagement and a socialist government and you can screw even the best basis
    Overall i i wou edge my bets with some exposure to at least some Australian sectors after the crash
     
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  12. sptrawler

    sptrawler

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    IMO, it is difficult to value our market, we have lost a lot of manufacturing but have gained a lot of mining efficiency improvements, add to this an influx of cashed up Asians makes it difficult to pin down where we are at.
    Just my opinion.
     
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  13. Sir Burr

    Sir Burr

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  14. aus_trader

    aus_trader

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    I have a question regarding threshold for self-funded vs pensioned as I am not retired yet. If a self-funded retiree loses a lot of his/her/their wealth through a major share market downturn or loss of investment property on their SMSF etc, at what point are they eligible to claim part pension again ? i.e. what happens if their nest egg is no longer enough to live on, or it runs out ?
     
  15. sptrawler

    sptrawler

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    A big question, it depends if the person is above pension age or below it, if they are married or single and if they own a home or are renting.
    The ATO has all the thresholds on their website, but these third party summaries are easier to follow.
    https://www.noelwhittaker.com.au/resources/calculators/age-pension-calculator/

    The big issue I've heard from my mates on part pensions, is the time taken to process the application and the hoops that have to be jumped through.
    With the hit on the banks and their dividends, a lot of SMSF self funded members will be starting to access larger part pensions at the moment, it would have been really interesting if they had lost their franking credits as well.
     
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  16. Cam019

    Cam019

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    I spend about one third of my working week dealing with Centrelink for our clients as their correspondence nominee. @sptrawler is right, depends on age, single or couple and whether you own your own home or rent. Pre 01/01/1954, your age pension age is 65, with the age pension age increasing 6 months every 2 years, details can be found here. Most of our clients fall into the couple homeowner situation, @aus_trader assuming this is your situation, your maximum deemed asset base to entitle you to a part age pension is $863,500 (if this is not your situation, you can find the relevant thresholds here). Just keep in mind though, that if your spouse has reached preservation age (between 55 and 60 depending on when they were born) and is under age pension age (most likely 65) and they do not draw an income stream from their super/pension, their super is NOT deemed by Centrelink for the assets test until they either reach age pension age or start drawing an income stream. Additionally, by this time they would now be entitled to apply for their own age pension as long as your deemed asset levels were under the $863,500 threshold.

    I not long ago spoke to a customer service associate through the age pension line who told me that Centrelink have 7 weeks KPI's for processing claims. Effectively this means that no matter how much you demand to have an application processed faster, there is no requirement for them to do so before a minimum 7 weeks have lapsed from the date of application submission. Although, depending on who you get to speak with at Centrelink, after those initial 7 weeks have lapsed, you can ask to have the application escalated and request to have it processed ASAP. I have had a few applications go through quicker from this request and a few say that they can only be escalated if the clients are under financial hardship (there is a definitive definition for this but I can't recall it off the top of my head).
     
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  17. Belli

    Belli

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    Increasing the allocation to International slowly. Currently sits at 22% and will gradually increase it to the 25% - 30% range. Will use VGS to achieve it with fresh funds when they come in directed that way.

    More interested in increasing income and not focusing on yield.
     
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  18. Belli

    Belli

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    Did a small exercise to assist my understanding at least why I am not overly focused on yields but income.

    Two companies, one a bank, the other not.

    The bank in 2009 paid dividends totaling $1.46. The non-bank $0.53. No franking taken into account.
    In 2019 the bank paid dividends totaling $1.98. The non-bank $2.48.

    Dividends for the bank have remained flat for five years. The non-bank has increased its dividends by over 200% in the same period.

    That's NAB v CSL.
     
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