Superannuation is a great tool to help build wealth for retirement years.

By investing today, you can benefit from low tax rates, compounding, and eventually a tax-free passive income once you transition to the pension phase.

But how much do you need in your super to be able to get the passive income you want?

Let’s use a $6,500 per month passive income as a guide. Here’s a breakdown of how much you need, and how to get there.

How much do I need in my superannuation to get a passive income of $6,500 every month?

The easy calculation is for you to divide your annual passive income by the overall yield of your portfolio. Of course, the answer varies significantly depending what that yield is.

So first you’ll need to work out your annual passive income amount. If you’re aiming for $6,500 per month, that’ll be a total of $78,000 over the year.

It’s a large passive income, but its achievable if you have a high enough balance.

If your portfolio has a 3% overall dividend yield, you’ll need to have a total superannuation balance of $2.6 million to be able to earn your $6,500 per month passive income. That’s because $78,000 (your annual passive income) divided by 3% (your yield), is $2.6 million.

Then obviously, as your yield increases, the amount of money you need in your superannuation goes down.

So a superannuation portfolio with a 4% dividend yield would need to be $1.95 million in size to earn the same passive income.

Then a 5% yielding portfolio would need $1.56 million, a 6% portfolio would need $1.3 million, and a 7% yielding portfolio would need closer to $1.1 million to earn the same dividend income.

And so on…

So, if I invest in the highest-yielding ASX shares available, that means my balance can be lower and still earn the same?

Technically yes. But it’s not a good idea from an investment perspective.

When it comes to ASX dividend shares, generally the higher the yield, the higher the risk associated with that stock.

Rather than trying to get rich quick, it’s a better idea to concentrate on a diverse range of good-quality businesses with strong balance sheets and stable earnings. These stocks are most likely to stand the test of time and while also building wealth.

What does a diversified portfolio look like?

Say you eventually plan to have around $1.5 million in your superannuation to invest for passive income. You could earn around $6,500 per month off a portfolio yielding around 5% overall. 

That doesn’t mean that every investment in that portfolio has to be 5%. It can be a variation which equates to a combined overall 5% yield.

And remember, you don’t need to invest the whole sum in one go. Start with a monthly investment and let compound growth do some of the hard work for you.

For example, I’d look at splitting my portfolio into different yielding stocks. 

I’d look to have around 65% invested into mid-range yielding ASX shares around 4-5%, another 20% invested into slightly higher yielding stocks maybe around 6%, and the remaining 15% could be invested into riskier but much higher yielding shares.

I’d also look to buy the ASX shares across multiple sectors to diversify my portfolio even further.

It’s important to note that the majority of ASX shares pay their dividends every six or 12 months. Only a small handful pay every month.

Also be aware that while a 5% yield from a diversified portfolio is a reasonable long-term target, it’s not guaranteed and could fluctuate depending on the company’s profits. 

The post How much do I need in my superannuation to receive $6,500 per month in passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Perpetual Ltd (ASX: PPT) share price is in focus after the company revealed it has received a revised non-binding, indicative takeover proposal at $22.07 per share from EQT AB, up 2% from the previous offer.

What did Perpetual report?

• Received a revised non-binding indicative proposal from EQT AB to acquire Perpetual at $22.07 per share
• The offer is 2% higher than EQT AB’s original proposal of $21.64 per share
• Proposal remains conditional on several factors, including sale of Wealth Management to Bain Capital
• No shareholder action required at this stage

What else do investors need to know?

The new proposal from EQT is not yet binding and is subject to a range of conditions. These include completing the sale of Perpetual’s Wealth Management arm to Bain Capital, thorough due diligence, successful negotiation of binding agreements, and regulatory approvals.

Notably, EQT’s proposal states it would be withdrawn if disclosed. Despite this, Perpetual’s board has decided it is in shareholders’ best interests to be informed right away, demonstrating a focus on transparency.

What’s next for Perpetual?

Perpetual’s board and advisers are thoroughly evaluating the revised offer. However, there is no certainty a binding deal will be made or that any transaction will go ahead. In the meantime, the board remains confident in its ongoing business strategy, particularly the simplification program and the value of its diverse earnings.

Perpetual has committed to keeping shareholders and the market updated in line with its disclosure obligations. Investors are encouraged to stay tuned as the company updates on any major developments.

Perpetual share price snapshot

Over the past 12 months, Perpetual shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post Perpetual receives sweetened $22.07 EQT AB takeover bid appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Betashares is paying its next lot of distributions (dividends) for its ASX exchange-traded funds (ETFs) today.

It’s been a memorable dividend season for ETFs, with some mega payments from funds invested in international shares and miners.

Six ASX ETFs are paying a 10%-plus dividend yield in a single payout this season.

Currency-hedged ETFs have delivered particularly well, with hedging magnifying returns by up to 10x in some cases.

Own other ETFs?

Here are the finalised distribution amounts for this season.

If you own Vanguard ETFs, see this season’s final distributions here.

Interested in VanEck ETFs? View final distributions here.

If you’re invested in iShares ETFs, see final distributions here.

Invested in Global X ETFs? Find out final distributions here.

The post Own NDQ, GAME, or other Betashares ASX ETFs? It’s pay day for you! appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.