Sustainable Retirement Income

Retirees need their money to last. Outliving retirement income is a fear of every retiree and an outcome every advisor should seek to prevent.

Low Rates Mean Low Income

Low yields and a thirst for retirement income has led many advisors to stretch for yield while risking principal.

But there are other means to meet income needs.

 

Systematic withdrawals can complement other sources of income for retirees. The key is to avoid large losses while growing capital.

Let’s say a client has accumulated $1,000,000 for retirement and need income, above that supplied by Social Security, to support other sources of income.

 

This client retires in December of 1997 and needs $50,000 annually to supplement retirement income starting in January of 1998.

The hypothetical below looks at the results after 20 years, using actual historical returns from three different investment choices, and assumes annual inflation adjustment to withdrawals of 2%.

Source: Zephyr StyleADVISOR and Swan Global Investments. * Source: Zephyr StyleADVISOR and Swan global Investments. Hypothetical analysis above is using actual DRS results from the Select Composite, net of fees, not backtested performance numbers. Past performance is no guarantee of future results. See our Investing for Income presentation or visit www.swanglobalinvestments.com for more information.

With a track record of limiting bear market impacts and consistent rolling returns over market cycles, the Swan Defined Risk Strategy (DRS) may serve as a sustainable income vehicle, while providing growth of capital.

 

Consider the Swan DRS as a complement to fixed income allocations to provide sustainable retirement income.