It was a busy week for Australia’s top brokers. This has led to a number of broker notes being released. 

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Guzman Y Gomez Ltd (ASX: GYG)

According to a note out of Morgans, its analysts have upgraded this quick service restaurant operator’s shares to a buy rating with a $31.00 price target. The broker has been looking at recent industry data and notes that consumer spending has been soft, particularly at the low income side of the market. And with interest rates potentially heading higher from here, the broker concedes that the industry outlook is challenging. Nevertheless, it feels that this is more than priced into Guzman Y Gomez shares at current levels following recent weakness. As a result, the broker feels now could be an opportune time to invest. The Guzman Y Gomez share price ended the week at $25.61.

Lovisa Holdings Ltd (ASX: LOV)

A note out of Bell Potter reveals that its analysts have upgraded this fashion jewellery retailer’s shares to a buy rating with a $27.00 price target. Bell Potter has been looking ahead to the company’s annual general meeting in November. The broker highlights its belief that Lovisa will experience relatively easier comparables and retain most of the growth reported at the start of FY 2027 when it provides its trading update. It notes that this will be supported by the fact that around 80% of revenue occurs outside Australia. The exit of a key competitor should also provide further support and offset risks in the local market. In light of this and recent share price weakness, the broker sees the current valuation as attractive. The Lovisa share price was fetching $22.62 at Friday’s close.

Megaport Ltd (ASX: MP1)

Analysts at Citi have retained their buy rating and $24.60 price target on this network solutions company’s shares. According to the note, the broker believes Megaport is well-placed to continue benefiting from increased spending on artificial intelligence inference. In fact, Citi believes the only risk is executing on its strong compute pipeline. And with its strong balance sheet and attractive contract economics, the broker believes Megaport is positioned to pursue further contract wins. Though, it concedes that significant contracts could require another equity raising to fund. The Megaport share price was trading at $18.54 at the end of the week.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Lovisa and Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa and Megaport. The Motley Fool Australia has recommended Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Single pensioners will get an extra $36.80 per fortnight under inflation adjustments to the age pension effective today.

This raises the full pension payment to $1,237.70 per fortnight.

Couples on the full pension will receive an extra $27.80 per partner, per fortnight, or $55.60 combined per fortnight, from today.

This increases the full pension to $933 per partner, per fortnight, or $1,866 combined per fortnight.

Is the pension enough to fund your retirement?

No, it’s not.

Annually, the newly adjusted full age pension totals $32,180.20 for singles and $48,516 for couples.

The ASFA Retirement Standard, which is considered Australia’s benchmark retirement budgeting tool, lays out the costs of living today.

AFSA says a comfortable retirement costs $56,166 per year for single homeowners and $78,998 per year for couple homeowners.

A modest retirement costs $36,548 per year for single homeowners and $52,690 per year for couple homeowners.

For renters, a modest lifestyle costs $51,418 per year for singles and $69,376 for couples.

ASFA does not provide a cost estimate for a comfortable retirement for renters.

These figures are in today’s dollars, and ASFA adjusts them quarterly to account for inflation.

ASFA lays out exactly what it means by a ‘comfortable’ retirement and a ‘modest’ lifestyle here.

What’s the gap?

For a comfortable retirement, single homeowners receiving the full age pension need to plug a $23,985.80 hole every year.

Couple homeowners aiming for a comfortable retirement need to find $30,482 per year to cover the gap.

For a modest retirement, single homeowners receiving the full pension need another $4,367.80 to cover their living costs.

Couple homeowners getting the full pension need to find $4,174 per year to fund a modest retirement lifestyle.

Single renters on a full pension face a gap of $19,237.80 per year to fund a modest retirement.

Couple renters on a full age pension need to find $20,860 per year to fund their costs of living.

So, how do you find that extra money?

The most obvious way, of course, is superannuation.

When people retire, they typically transfer their superannuation from the accumulation phase into an account-based pension.

This moves their super into what’s known as the retirement phase, where investment earnings are generally tax-free.

Pension payments from your superannuation are also generally tax-free once you’re aged 60 or over.

But there’s a catch…

If you have a large amount of money in superannuation, you’re unlikely to be eligible for the full age pension from Centrelink.

However, as you draw down your super throughout retirement, you may eventually become eligible for the full payment, depending on the value of all your assets combined.

The pension is means tested using an assets test and an income test.

Assessable assets include your superannuation, ASX shares, bonds, investment properties, cash, and home contents.

Under the assets test, single homeowners whose assets are worth less than $333,000 qualify for the full age pension.

Single homeowners whose assets are worth between $333,001 and $745,750 are eligible for a part-payment.

Couple homeowners whose assets are worth less than $499,000 qualify for the full age pension.

Couple homeowners who have between $499,001 and $1,121,000 in assets are eligible for a part-payment.

The post Age pension rises $37 per fortnight today 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 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.

Retiring with $1 million in superannuation to support a comfortable retirement is a great goal.

And, depending on your lifetime salary and whether you make additional voluntary contributions to your super over time, it’s certainly an achievable figure.

As for how much passive income you can earn from that $1 million balance, that will, of course, depend on the yield that you’re earning.

Now, for the purposes of this article, we’ll assume you have a sizeable amount of additional assets, as well as other liquid savings and investments to cover any unexpected costs. If not, it’s generally not advisable to invest all of your superannuation into the stock market.

But if that is the case, it could enable you to invest the full $1 million in quality S&P/ASX 200 Index (ASX: XJO) dividend stocks. With history as our guide, this is a great means to achieve a reliable annual passive income stream.

We’ll look at a few of those quality ASX 200 dividend stocks below, as well as calculate how much passive income you might expect to receive from that $1 million in superannuation.

But first…

Inflation and trailing yields

The idea behind this $1 million superannuation investment is to earn an annual passive income stream without drawing down on the balance. You’ll also want to at least match inflation levels to ensure the real (inflation-adjusted) income you’re earning isn’t eroded over time.

Now, the S&P/ASX 200 Gross Total Return Index (ASX: XJT), which includes all cash dividends reinvested on the ex-dividend date, has gained 42.2% over the past five years. That works out to an annualised return of about 7.3% per year.

Remember that figure.

Also, remember that the dividend yields you usually see quoted are trailing yields. Future yields may be higher or lower depending on a number of company-specific and macroeconomic factors.

With that said…

How much passive income from a $1 million superannuation investment

We’ll look at three ASX 200 dividend stocks to give you some idea of the yield you might receive from that superannuation investment (based on market prices on 10 September).

First, Aussie fuel supplier Ampol Ltd (ASX: ALD) shares trade on a fully-franked trailing dividend yield of 5.7%.

Then we have big four ASX 200 bank stock Westpac Banking Corp (ASX: WBC). Westpac shares trade on a fully-franked 4.4% trailing dividend yield.

And third, ASX 200 telco Telstra Group Ltd (ASX: TLS) shares trade on a 4.3% trailing dividend yield, franked at 90%.

If you were to invest the same amount into each of the above ASX 200 dividend stocks, you could then expect a yield of 4.8%.

So, your $1 million superannuation should see you earning $48,000 a year in passive income, with tax benefits from those franking credits.

Now remember the 7.3% annualised gains posted by the S&P/ASX 200 Gross Total Return Index? That extra 2.5% in annual growth over the passive income yield should be enough to mitigate the eroding effects of inflation over time.

The post I’m planning to retire with $1 million in superannuation. How much passive income can I earn?  appeared first on The Motley Fool Australia.

More reading

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• 7 ASX 200 shares with reaffirmed buy ratings this week
• Starting with $20,000, how to build a portfolio generating $5,000 a year in passive income
• Telstra vs NAB: Which ASX blue chip is the better buy?
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Motley Fool contributor Bernd Struben 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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.