CASE STUDY: Regular Income from an Investment Portfolio (Alan)

Alan was age 68 when he was introduced to his Saturn adviser. He was fit and healthy, still working and planned to continue until he was 70. Alan had $500,000 in bank term deposits and a $300,000 rental property with an $80,000 mortgage. He also had a company superannuation scheme.

 

Alan’s goal was to have an investment plan that would provide him with cash for everyday expenses, as well as capital growth for his and his children’s future needs without too much worry.

 

Alan decided to invest $200,000 of his term deposits with Saturn until he felt comfortable. He wanted to earn a higher return than bank term deposits without taking on too much risk and to ensure his funds maintained their real value after inflation.

 

Alan’s adviser assesses his financial risk profile to be Balanced and recommended an appropriately diversified investment portfolio for his needs.

 

Alan was very pleased with how his portfolio performed, and two years later when he retired, he decided to add $400,000 from his company superannuation pay out. At the same time he started taking a regular $1,800 monthly cash withdrawal from his portfolio for his daily living expenses to supplement his NZ Superannuation and rental income.

 

Alan is pleased that he has a good regular income from his portfolio and his capital is still continuing to grow in value.

 

The graph below is from Alan’s annual portfolio report. It shows his regular withdrawals in blue and the change in his portfolio valuation in red.

 

Alan's graph