D. and H. are a retired couple was living primarily on investment income. Their investment strategy was very conservative. They avoided taking risks with their portfolio and invested most of their assets in Certificates of Deposit. The goal was to use their Investment Portfolio to generate a safe income to supplement their social security.
How we Help
The couple was bothered with low bank interest rates that limited their income and they wanted to investigate other income-producing opportunities. She and her husband looked to schedule a meeting with Southwestern Retirement Planning Advisors to help them explore various options. We would first analyze their Personal Investment Risk Tolerance to see if it aligned with what the desired return for their investment portfolio. We then review their current portfolio and helped the couple determine a more appropriate asset allocation. We also review their past tax returns to better understand and manage their future tax liabilities. After a thorough analysis, we would customize a new investment portfolio for them to better address their needs.
We would also present additional ways to assist in achieving a more desirable retirement income using systematic withdrawals from their investment accounts. These withdrawals would provide a fixed monthly cash payment that would be set up for direct deposit to their personal checking account.
We would consider several Fixed Income investments, including municipal, government and corporate bond funds. These investments may provide a higher cash yield without incurring an undue amount of risk.
We would also maintain some exposure to Equity investments to help keep pace with inflation and to potentially grow their principal balance. Dividends from these investments would also provide more cash income for their use.
We would also propose some Alternative Investments, investments not traded in the stock or bond markets, as a way to reduce portfolio volatility and provide additional cash income on a regular basis.
Our Financial Planning should help the couple increase cash flow from their investments while maintaining an appropriate level of risk. The additional income should enable them to help maintain their desired lifestyle and still be financially secure.
The Moral of the Story: Income can be increased through better investment strategies.