Get to know the current tax rules. If your taxable income for the year is $ 100,000.00 the tax on that is $ 23,920.00 so you only get left with $ 76,080.00 to live on/invest.
PIE incomes (including dividends) are taxed @ 28% which is a final tax for those with a marginal tax rate of 33% (ie paying tax @ 30% or higher for every extra $ you earn above 40K).
Governments can change the tax rules with the stroke of a pen so try to base your calculations for retirement income only on what you can provide for yourself.
Don't assume that National Superannuation will always be there for you - some year ago it was subjected to a very unpopular surcharge if you earned "too much". Plan accordingly.
Its not so very many years ago that the sum deemed to be suitable for retirement was $ 500K for a married couple. Now I read that the latest suggested figure is $800K per person.
Those relying on "safe" investments providing interest income have had a serious decline in their living standards in the last few years. With interest rates of say 1% the purchasing power of any capital sum held is being seriously eroded by the inflation rate.
New cars are great! but work on the basis that they will be worth approx 20% less as you drive them out of the dealers yard!!
Don't rely on brokers recommendations!! I have tracked their recommendations announced every New Years and have found that by year end they have been lucky if they got 2 out of 5 right.
Don't beat yourself if you get an investment wrong and lose money. We all do that - the trick is to learn from the experience, move on, and try not to repeat it.
Steer clear of any "Investment Advisor" who does not admit that they also make mistakes. One I spoke to in the past told me that they got it right about 80% of the time - needless to say they got some of my money!
Above all - good luck and enjoy the ride - it can be a rollercoaster at times but you do have time on your side. Anything you set aside is better than nothing.
Originally Posted by percy
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