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.

Additional Disclosures: Swan Global Investments, LLC (“Swan”) is an independent Investment Advisory company headquartered in Durango, CO. Swan is registered with the US Securities and Exchange Commission under the Investment Advisers Act of 1940. Note that being an SEC registered Investment Adviser does not denote any special qualification or training. Swan offers and manages The Defined Risk Strategy (“DRS”) for its clients including individuals, institutions and other investment advisor firms. Swan Global Investments has affiliated advisers including Swan Global Management, LLC, Swan Capital Management, LLC, and  Swan Wealth Advisors, LLC. There are nine DRS Composites offered: 1) The DRS Select Composite which includes non-qualified accounts. 2) The DRS IRA Composite which includes qualified accounts. 3) The DRS Composite which combines the DRS Select and DRS IRA Composites. 4) The DRS Institutional Composite which includes high net-worth, non-qualified accounts that utilize cash-settled, index-based options held at custodians that allow participation in Clearing Member Trade Agreement (CMTA) trades. 5) The Defined Risk Fund Composite which includes mutual fund accounts invested in the S&P 500 equities. 6) The DRS Emerging Markets Composite which includes mutual fund accounts invested in emerging markets equities; 7) The DRS Foreign Developed Markets Composite which includes all research and development account(s), and mutual fund accounts invested in foreign developed markets equities; 8) The DRS U.S. Small Cap Composite which includes all research and development account(s), and mutual fund accounts invested in U.S. small cap equities; 9) The DRS Growth Composite which includes all research and development account(s), and mutual fund accounts invested in the S&P 500 equities. Additional information regarding Swan’s policies and procedures for calculating and reporting performance returns is available upon request.