Sequence-of-returns risk in early retirement is manageable with a big enough cash buffer. What I'd test is how you'll feel spending it.
In this listener Q&A, I work through Michael's plan to retire at 52 and use an ETF portfolio plus three years of living expenses in an offset to cover the eight to ten years until he can access super. I also explain why I like locking in an undrawn loan facility before you need it. Then I look at a 33-year-old couple's debt recycling bonus and RSU income into ETFs, and where ownership structure, tax drag, and internally geared ETFs fit in. I cover what the draft 30% minimum tax on discretionary trusts means for passive investment trusts (short answer: do nothing yet). I finish with whether money above $250,000 in an offset account is at risk.
00:00 Michael's question: retiring at 52, before super access
02:39 Do the numbers stack up?
03:15 Building a valuation-aware ETF portfolio
04:43 The behavioural test: spending your cash buffer in a downturn
06:15 Should Michael gear any further?
07:58 Locking in borrowing capacity: borrow when you don't need it
11:47 Listener two: debt recycling RSUs and bonuses into ETFs
12:54 Why RSUs matter for blue-chip property demand
15:59 Spouse super contributions, and a tax policy idea
18:20 Super contribution splitting
19:42 Ownership structure for a debt-recycled portfolio
23:03 ETF distributions and tax drag
24:24 Is a non-trading investment company worth it?
25:21 Internally geared ETFs: GHHF and GBGL
27:14 Justin's question: the proposed 30% minimum tax on trusts
28:26 Problems with the draft legislation
30:09 Options: gearing, CGT rollover, fixed elections
31:09 Why to wait: 1 July 2028 start and an election first
32:25 Craig's question: offsets above the $250,000 guarantee
34:15 Checking whether your lender is an ADI
34:31 Coming up: are you on track if your wealth is outside super?
Related episodes:
Ep 427: How to assess whether property and share markets are attractively priced
https://investopoly.buzzsprout.com/2005600/episodes/19832497-ep-427-how-to-assess-whether-property-and-share-markets-are-attractively-priced
Ep 425: Family trust investing: Are trusts still worth it under proposed tax changes?
https://investopoly.buzzsprout.com/2005600/episodes/19764156-ep-425-family-trust-investing-are-trusts-still-worth-it-under-proposed-tax-changes
Q&A - Cash-heavy at 48, bridging to early retirement, and debt-free at 31
https://investopoly.buzzsprout.com/2005600/episodes/19753485-q-a-cash-heavy-at-48-bridging-to-early-retirement-and-debt-free-at-31
Optional:
Q&A - Untangling a messy structure, cutting losses, and low-income investing
https://investopoly.buzzsprout.com/2005600/episodes/19720854-q-a-untangling-a-messy-structure-cutting-losses-and-low-income-investing
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Over the years we've written hundreds of articles. These three bring our best thinking together on the topics that matter most right now: choosing a super fund, debt recycling, and navigating the new tax changes.
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This podcast provides general information about finance, tax and credit. It doesn't take into account your specific objectives, financial situation or needs, so you need to assess whether it's relevant to your circumstances before acting on it. If you're not sure, speak to a licensed, trustworthy professional.
