Superannuation is a great way to build up a nest egg that can provide an income stream in your retirement, but as with all things, it pays to have a plan in place so you know what to expect to earn.
One of the great things about superannuation is that you can contribute to it on a tax-effective basis while you are working to boost your nest egg.
This year, the concessional contributions cap has increased to $32,500, meaning you can contribute up to this amount and pay only 15% tax.
Keep in mind that the $32,500 level includes any contributions made by your employer.
Another easy way to boost your contributions is to salary sacrifice out of your pay, with those amounts also contributing towards the $32,500 cap.
One of the downsides of contributing extra money to superannuation is that contributions are generally tied up until you turn at least 60; however, on the upside, earnings within your superannuation are only taxed at 15%, meaning your money compounds more effectively.
Now let's look at what exactly you'd need to generate the returns we're talking about.
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How much is needed in superannuation for $2,000 in weekly passive income?
This amount on a weekly basis translates to $104,000 per year, which makes the maths a bit easier.
Let's say you were earning 5% on your nest egg. This would mean you'd need to divide the yearly amount by five, then multiply by 100 to get $2.08 million, which is how much you'd need to have invested to return $2000 a week.
If you earned 10% per week, the lump sum figure would drop to $1.04 million.
I'd suggest a dividend return of 7.5% is realistic, which would need a lump sum of $1.39 million.
What high-yielding shares paying 5% to 10% could I invest in?
When it comes to income-generating stocks, steady and reliable can be a great combination.
You might not get great capital returns, but hopefully the income stays steady.
One such stock that brokers are tipping to deliver returns of better than 6% through to 2030 is Charter Hall Retail REIT (ASX: CQR).
Keep in mind that this stock does not pay franking credits, which are also a good source of income once your tax rate drops to zero.
Dexus Industria REIT (ASX: DXI) is also paying a healthy 6.8%.
Personally, I'm also a fan of the Wilson Asset Management funds, such as WAM Strategic Value Ltd (ASX: WAR), which is paying a yield of 5.9%, rising to 8.4% once franking credits are included, and WAM Active Ltd (ASX: WAA), which also recently increased its dividend and is paying out an identical yield to WAM Strategic Value.
Regal Partners Ltd (ASX: RPL) is also a good option, with broker Morgans forecasting the financial services company will pay out 8.1% for this year, followed by 6.9% and 7.8% in the following years.
Among resource stocks, Fortescue Ltd (ASX: FMG) is paying a 6.77% yield while Woodside Energy Group Ltd (ASX: WDS) is paying 5.18%, both fully franked.
Pipeline operator APA Group Ltd (ASX: APA) is paying a 5.85% yield while toll roads company Atlas Arteria Ltd (ASX: ALX) is paying a hefty 8.04%, however both of these dividends are unfranked.
Among the banks, Westpac Banking Corp (ASX: WBC) is paying 4.06% fully franked, while Bank of Queensland Ltd (ASX: BOQ) is paying 6.06% also fully franked.
This is by no means an exhaustive list of dividend stocks to consider, but consider it somewhere to start.
