Sustainable Retirement Income

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

Low Rates Means Low Income

Low bond yields (interest rates) mean low payments for retirees from these fixed income investments. As a result, many retirees have turned to other, often riskier, sources of income.

 

Systematic withdrawals, or taking regular withdrawals from an account, can complement other sources of income for retirees. The key is to avoid large losses while growing capital.

 

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

Let’s say you have accumulated $1,000,000 for retirement. You need $5,000 per month of income to complement your other sources of income, such as Social Security. The hypothetical below uses actual historical returns from three different investment choices and assumes your monthly withdrawal is adjusted annually 2% to keep pace with inflation.

The average person retires around 65 and lives about 20 years (average life expectancy of men and women).

You retire in December of 1997 and start taking annual withdrawals of $50,000 in January of 1998 to supplement Social Security.

After 20 years, how much would you have withdrawn and how much would you have left in the account?

DRS as a Systematic Withdrawal Plan

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.

Staying Power for Retirement Assets:

Remaining Invested, Withdrawing Funds, and Outpacing Inflation

The Swan Defined Risk Strategy (DRS) may provide staying power and growth for your assets in retirement, even while taking systematic withdrawals from your account.

 

Ask your financial advisor about how you could use the DRS 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.