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Retirement income modelling
Retirement Income Modelling
When can you actually stop working? That’s the question our retirement income modelling answers. It’s the heart of your Early Retirement Blueprint.
We map every dollar you earn, owe and own, then project your whole asset base forward. You see the year your investments can pay you the income you want, on conservative numbers.
General information only. Not personal advice.
Your Early Retirement Blueprint
See your next 15 years before you live them
This is the main benefit of your Early Retirement Blueprint. I do your retirement income modelling, so you can see the trajectory of your asset base over the next 5, 10 and 15 years.
You’ll know exactly where you stand, based on the conservative assumptions I use. You can see the strategy play out before you commit to it.
That’s how we get your buy-in. Once you can see it, my team helps you execute it and make it a reality.
We showed one client they could stop working at 52, not 68, on $15,000 a month in passive income.
We update your model at your yearly progress meeting, or whenever your strategy or circumstances change.
What we model
Every dollar, allocated
We start with your real numbers: your fixed costs and your discretionary spending. Then the strategy allocates every dollar left over.
- Investment loan interest. If you borrow $1M to invest, the model covers the interest bill first.
- Your home loan. Surplus above your minimum repayments goes into your offset account.
- Debt recycling. We show you exactly how many years it takes to pay off your home loan, and how big your portfolio will be by then.
- Super. Once the home loan is gone, the surplus is redirected into super.
The result is the trajectory of your overall asset base, year by year, all the way to retirement. Learn more about debt recycling.
Your whole balance sheet
Everything you own, in one model
We include everything on your balance sheet, not just the investments we manage. That’s how you get the full picture.
- Your RSUs. A lot of tech executives are still top heavy in company stock. If you have $1M of unvested shares, we bring them in as they vest at the current share price, take out 47% for tax, and put what’s left to work in the plan. More on our employee share scheme advice.
- Your investment properties. Many clients own one or two. We go into your tax return and put in the real numbers: the rent and every expense. Then we apply 5% capital growth.
- Alternative assets. Bitcoin, private equity and anything else you hold goes into the model too.
- Inheritance. If you’re 50, your parents may be in their 70s or 80s. Even if an inheritance is 10 years away, it’s still money coming in, and it changes your decisions.
Factoring in an inheritance also helps you see what kind of legacy you’ll be able to leave your own children. That’s a big part of our conversations about estate planning.
Our assumptions
Conservative numbers, on purpose
We don’t promise returns. We model on purpose with numbers that are lower than long term averages:
- Around 5% a year capital growth on investment property
- Around 6% a year for portfolios and super, depending on your risk profile, with fees taken out
- Everything indexed to inflation, including your retirement income goal
If your plan works on those numbers, you can be confident you’re on target. If markets do better, you get there sooner.
We’re also honest when a strategy doesn’t earn its keep. Sometimes the modelling shows gearing doesn’t make you much better off. When that happens, we tell you.
Scenarios
Model the life you actually want
Retirement doesn’t have to be a cliff. We can model any scenario you want to test.
Take a client earning $500,000. They work full time until 55, then consult part time on $150,000 a year until 59. Working part time gives your investments more years to compound. You let your asset base roll, so you’re not 100% reliant on passive income straight away.
You can’t touch your super until 60. If you want to retire in your 50s, you need to live off the income from your assets outside super. We build the model around that gap.
It works the other way too. Many clients find their asset base is growing faster than they can spend it. This year, a lot of clients have asked me, “Mike, can I afford an extra $50,000 a year for holidays?” Once you’ve seen how good Europe is, you might want to stay longer. The model shows you whether you can, without putting your plan at risk.
Illustrative only. Your numbers will differ.
It’s all about your baseline, and a work optional lifestyle. A model only works if the cash flow behind it does. That’s why we help you with cash flow management, so the strategy and compounding do the heavy lifting.
I act as your CFO. I project manage your accountant, broker and other specialists so the plan in the model is the plan that happens.
83 LinkedIn recommendations
What clients say on LinkedIn.
Questions
Frequently Asked Questions
What is retirement income modelling?
It projects your income, spending, debt, investments and super year by year. It shows when your assets can pay you the retirement income you want.
What returns do you assume?
Conservative ones. Around 5% growth for property and around 6% for portfolios and super, depending on your risk profile and after fees. Everything is indexed to inflation.
Can I retire before 60?
Yes, but you can’t access super until 60. You need enough assets outside super to fund the years in between, and the model shows if you have them.
What do you include in the model?
Everything on your balance sheet: your RSUs after tax, investment properties using the real numbers from your tax return, alternative assets like Bitcoin and private equity, and any expected inheritance.
How often is the model updated?
At your yearly progress meeting, or when your strategy or circumstances change.
Is modelling a separate service?
No. It’s the main part of your Early Retirement Blueprint, then we update it as part of our ongoing advice.
Know your number
Want to see when you can stop working?
15 minutes. No cost, no obligation.
