Financial adviser discloses pension formula for superannuation

How close are you to retirement? The financial advisor presents his flawless algorithm for determining when one can retire.

A five-minute exercise to determine when you can comfortably retire can be completed within this time frame.

James Wrigley, a financial adviser, leaked the formula on his TikTok channel.

To afford retirement, Australians stay in the labor market for long periodsMr Wrigley (pictured) said his formula could be .

A financial advisor has leaked a formula that can be quickly calculated on a single sheet of paper to determine how far you are from retirement.

This week, finance guru James Wrigley shared the exercise on his popular TikTok channel, noting that “for people wanting to trade in the 9 to 5, it can demonstrate the gap you need to close to retire.” .

In recent years the retirement age in Australia has gradually increased as the cost of living has outstripped income growth and low interest rates, while fantastic for borrowers, discourage investment.

Mr. Wrigley said it’s simple to calculate the gap between your current financial situation and the position you want.

He said: “All you need is a piece of paper and a pen to scratch this out in under five minutes.”

“On a sheet of paper, list your nest egg assets in the upper left corner.

This includes cash in the bank, savings accounts, time deposits, superannuation funds and any real estate or stock investments. And add them all together.

Australians are working longer and retiring later, according to official statistics (stock image)

Mr. Wrigley then clarified that the upper right corner is reserved for “lifestyle assets”, which are usually the majority of items you use on a daily basis.

“The value of your home, a vacation home if you have one, your cars, boats, RVs and motorcycles,” he said.

Then all the money you owe is shown on the bottom left.

“This includes your home loan or mortgages on other properties, a car or boat loan, the total amount you owe on credit cards or buy-it-now services, and personal loans,” he said. he explains.

Mr. Wrigley added that to calculate the “net nest egg balance” or the liquid assets currently available for retirement, one must subtract the total amount of debt from the net nest egg balance.

He said: “It’s the sum that will put you in a position to retire, not your lifestyle assets.”

These things are good to have because they make our lives more comfortable and enjoyable, but they do nothing to help you retire.

Mr Wrigley (left) divided a sheet of paper into four pieces, listed his assets and liabilities, then applied his calculation (right)

To calculate the difference between your net nest egg balance and what you need in retirement, an additional step is required.

“Ideally, you should calculate how much you want to spend each year in retirement – ​​$60,000, $100,000 or whatever that after-tax figure is – and then multiply that by 20 to get the amount you’ll need for retirement,” he advised.

Mr Wrigley said the number 20 would generally provide enough cash flow from investments to maintain a solid income, whether you retire at 50 or 70.

He said, “Then that’s where you ought to be, and your net nest egg is where you are.”

“If there’s a gap, you can work to close it, but assuming it’s already bigger, congratulations, if your setup is right, you can probably retire today.”


A sheet of paper is divided into four pieces. And note:

Cash/savings, retirement pensions, investment property and stocks are examples of NEST EGG ASSETS.

Examples of LIFESTYLE ASSETS include a home, vacation home, automobiles, boat, motorhome, and bicycles.

Mortgages, car loans, boat loans, van loans, credit card balances, buy-it-now-pay-later balances, and personal loans are examples of DEBTS.

Deduct debts from nest egg assets to arrive at a net nest egg total.

In the empty column, enter the amount you estimate you will need annually in retirement and multiply it by 20.

The difference between the net nest egg and this sum is the amount required to retire.

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