Alexmartin
Registered User
- Messages
- 61
So he's getting 10,200 income from the rental, less costs. There is no way 100K will buy income of even close to 10K unless your friend has some kind of medical condition that means he will not live long.
I have a friend who has an investment property worth €100k (slightly more, but lets choose round figures.)
He also has €200k in his private pension fund.
He is 58 and wants to retire at 60.
Is he better off selling the property and buying €300k worth of an annuity or would he be better off keeping it and getting rent of €850 pm that he is getting now.
Or alternatively if he retires at 65 does that change anything if those amounts remain the same?
What kind of annuity would you get at 60 for €100k?
As an example, here is Switzerland the usual 'back of a napkin' calculation is: (65% - 70% of annual salary - annual state pension) divided by about 3.5.% - 4.5% of course it is not very accurate, but it give you a good indication of how you are doing and if there are any major holes you need plug.
Does that assume you were spending all of your salary while you were earning it? When I was working I was saving 60% of my after-tax salary. At a pinch I could survive on 20% of my gross salary, even without a state pension (for which I won't qualify for another 20 years anyway). If I'd waited until I could generate 65-70% of annual salary I'd probably be decades away from retirement. I presume it depends on aspirations.
Since when did an investment property return 10% pa? The discussions on here were talking more like 1% - 3%.....
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