Retirement portfolio

[Dolcile]

Hi everyone, I am looking for some ideas (hopefully real world examples) of how one might build a portfolio to fund retirement. My current thinking is something like:

5% cash.
20% international bond fund.
75% global equity fund. 

I am wondering if some NZ shares / REITs might a a good addition for some tax free distributions.

Would love to hear what others are doing / planning.   

[Perky]

I am no expert...but I think the imputation credits on nz shares is a worthwhile addition to your overall portfolio returns if you can utilise.

Outside of that you just need a strategy and plan that works for you..there are many ways to skin the cat.

Like you can choose to hold a higher amount of growth shares like US market and just sell some when you want cash or do you hold more dividend shares which give you more of a guaranteed income stream but maybe less growth

nz and Australian shares are generally more defensive higher dividend payers but lower capital growth

If I was a younger retiree that thought I was going to live for a long time and was healthy..I would go more growth shares and cash a few up when needed.
 
Be interested what others say as I'm not retired ..lol

[Stoploss]

Hi everyone, I am looking for some ideas (hopefully real world examples) of how one might build a portfolio to fund retirement. My current thinking is something like:

5% cash.
20% international bond fund.
75% global equity fund. 

I am wondering if some NZ shares / REITs might a a good addition for some tax free distributions.

Would love to hear what others are doing / planning.   

Sounds like the settings on a lot of KiwiSaver Growth funds .

[Dolcile]

At a PE of 30x I'm starting to get a bit nervous about the S&P500 (which is a large part of my international equity allocation). And since I'm close to (early) retirement I'm  reconsidering my asset allocation. 

However when I think about increasing my bond allocation I'm so underwhelmed by the real returns.   Even if you can get a 4.5% yield, you loose 1/3 to tax and 2.5% to inflation which leaves 0.5% :-(

I'm wondering if that's where a greater nz share allocation comes in.  Not as correlated to the US, higher dividend payout ratio, and imputation credit. 

[Red Baron]

At a PE of 30x I'm starting to get a bit nervous about the S&P500 (which is a large part of my international equity allocation).

My broker zuggested ze "Vanguard Russell 2000 ETF" as an alternative to tracking ze "S&P 500".

Ze "Vanguard Russell 2000 ETF" eez an eendex vund zhat tracks ze 1,001st to 3,000th largest companies in ze USA, so avoiding ze pumped up "high flyers" (December 2024 figures: PER of S&P500: 26.9, PER of Russell 2000: 16.9).  More zpecific reasons to consider include (and I quote):

--------------

Potential US Tax Cuts   Small cap companies paying higher effective tax rates could see a greater earnings boost if corporate tax rates are reduced again.   Large scale international corporates leverage international tax strategies, and are less directly affected by US tax policies.

Historical Outperformance   Following the 2017 Trump tax cuts, the Russell 2000 outperformed the S&P500 showcasing its sensitivity to favourable tax changes.

US Domestic Focus   With less exposures to global trade disruptions, small caps could benefit from US centric economic growth and protective policies like tariffs.

Diversification Opportunity   Provides exposure to US domestic orientated sections such as customer discretionary financials and industrials which align with US economic strength.


-------------------------------------   

RB

[Red Baron]

Hi everyone, I am looking for some ideas (hopefully real world examples) of how one might build a portfolio to fund retirement. My current thinking is something like:

5% cash.
20% international bond fund.
75% global equity fund. 

I am wondering if some NZ shares / REITs might a a good addition for some tax free distributions.

Would love to hear what others are doing / planning.   

Deed I read zhat right?   You planned to have zero allocation to NZ Shares, yet you plan to leeve een New Zealand?    Zeems extreme.

RB

[Dolcile]

No, I plan to have some no share allocation.   Currently at 13% of the portfolio. 

[Red Baron]

No, I plan to have some nz share allocation.   Currently at 13% of the portfolio. 

I theenk zome of ze 'recommended asset allocations' do not consider ze potential lifespan and ambitions een retirement of vho zome zee as 'elderly'.  Seence being born in 1892, vaking my death een 1918 and vinally retiring een 1957, I have now been retired vor 67 years.  I ztill have great ambitions een retirement, my principal objective being ze taking over of Germany, via ze restoration of ze Kaisership.    Zo my eenvestment priorities are 'growth', 'growth' and more 'growth'.

You zhould have access to cash, zay $300k to meet unforeseen health needs (for reference zhis is ze amount you can get via health eensurance polices zhould you take one out).  Vhen I zay cash I mean 'easily liquidated assets', not having $300k een your 'current account'.   Zhat could be bonds, but I vould include 'bond like zhares' een zhat category as vell, zuch as utilities.    Vonce you have zhat zet aside, my advice vor ze rest of your portfolio eez to 'go vor eet'.   And zhat probably means a much greater proportion of NZ shares zhan 13%.

RB

 

[Mr Cashflow]

I'm also in the process of building a retirement portfolio. Some of the options that I would like to consider are to invest in high dividend yield stocks and undervalued stocks which include commodity stocks. In some period when assets become too hot, I  will  try to  hold some  cash  and will reinvest when I  see stocks with attractive valuation. I don't want to invest in any weak companies. If I see my stocks are never sell types of stocks I don't hesitate to keep them for the long run( as long as I want). Currently, I apply conservative approach to investment  given the historically  multi-year high asset prices.