Stay the course.
I did this for 2021 and I will continue to invest $30k into my shares portfolio for 2022.
My retirement date is set for 31 Dec 2026. That is 1786 days away or 58 months of work left. I will be 55 and a few months old.
My original plan to fund the 5 years before I can access my superannuation (ie from age 55 to 60) is to sell down my shares portfolio every year. And have one to two years of living expenses in cash, just in case the market isn’t cooperating at the time I retire.
However this plan has evolved. All because I started tracking my dividends as an exercise to track passive income in 2021.
Before 2021, I had no idea how much my dividend income was because the majority was reinvested immediately via Dividend Reinvestment Plans (DRPs). Cash did not hit my bank account so I was oblivious. Out of sight, out of mind.
So I was pleasantly surprised by the result.
I started to think that perhaps I won’t have to sell the entire portfolio. I could live on the dividends and make up the rest with cash. Unfortunately as a late starter, I just don’t have the timeline to have a big enough portfolio to live off its dividends alone.
By the end of 2021, my dividends were at 42% of my target for retirement. This target is based on half of my projected annual living expenses. It would be awesome if this target is exceeded – that would mean I need to save less cash.
So I’m giving myself two years to invest as much as I can into this shares portfolio. I will then reassess the dividend income and determine how much cash I need to save. At this stage, my plan is to save up to 2 years of living expenses in cash regardless. I will have 3 years to do so.
I can always revert to my original plan to sell down the portfolio if Plan B doesn’t work. Or at least sell off the individual shares I own and keep the ETFs and LICs. Based on my original plan, I’m at 77% of my target portfolio value.
We’ll see – it’s all a big experiment 😬
These goals are awesome. ⭐️ I like that as you learn about the fruits of your investing that you tweak your strategy and have the original goal there as backup. With the Will… do it soon. It doesn’t have to be too complicated. The lawyers can fluff it out. Just brainstorm the key points. It will take a big load off knowing your have things setup. Promise. 😆🤗
Can’t wait to see how you track and so keen to see how you work through the “preparing for retirement”
Hi Anna,
Thanks for the encouragement to do the Will 🙂 I always overthink things, haha! You are right – doesn’t have to be complicated at all.
Will definitely keep everyone updated on the “preparing for retirement” front 🙂
Cheers!
I’m probably too late here, but my friend Donna is awesome and she runs a company specialising in wills.
I have to get a new one – one of my sons changed his surname from his father’s to mine, so I’ll have to change that detail in my will.
https://atyourwill.com.au/
Thanks, FDJ – should’ve reached out to you first instead of googling!