Not a problem!
We typically see four phases in and around retirement:
- Approaching retirement
- Transitioning to retirement
- The big spending years
- The less active years
It is important to tailor your retirement assets to accomodate these (and other) developments.
We achieve this by:
- Reviewing all your assets that generate income and/or provide you with capital (think everything except the family home, car and contents).
- Projecting the income these can generate using the Capital Preservation Method and the Capital Depletion Method (more on these below)
- For your funds-to-invest component, we design a portfolio specifically for you to deliver on your requirements. Typically, it will look something like this:
We hold your next two year's requirements in cash and term deposits, so that you always have access. The next few years are largely invested in defensive asset classes with some growth allocation which is designed to outperform inflation. As these funds generate returns, we top up the cash and term deposit funds. The longer term investments have a greater growth asset allocation, designed to generate greater returns over the longer term. The profits from these funds top up the middle portfolios, which top up the cash portfolio. The proceeds keep moving left through the diagram, ensuring a constant cash supply to your bank account.
The amount you can withdraw each month / quarter / year depends on whether you want to leave some funds behind for your Estate (Capital Preservation method) or if you are happy to leave the kids the house and spend all of these funds (Capital Depletion method). Naturally, you can withdraw (and spend) more using the Capital Depletion method.
Talk to us today, to find out how we can design a portfolio to meet your requirements.