RETIREMENT & INVESTING

NEEDS NOT BE OVERCOMPLICATED – BUT IT DOES NEED PLANNING

We will then work with you to prioritise and order your next steps so you know exactly how to go about organising your financial affairs.
We’re often asked, “How much money do I need to retire?”. The answer lies in understanding the life you want to lead post retirement. It’s a very different number if you want to live in an apartment in New York, or in a beach hut in a remote village.

Being clear on your vision, your ‘wants’ and ‘must haves’, gives us a clear view of where we are heading. We then work to understand what you have already, and what income we can save to get you to that goal. Along the way to retirement, you will incur expenses such as university fees, weddings and a car needing an upgrade. We work these into your plan.

Lastly, we plan for post retirement draw down. This takes careful consideration now to make sure that we optimise tax when you start to use your money. How do we deal with Capital Gains Tax and Income Tax on retirement funds? Should you sell one of your investment properties first or use your unit trusts? Your investments now need to be in the right structures to make sure that draw down is effectively managed.

Our investment philosophy

HELPS YOU TO UNDERSTAND WHY WE CHOOSE THE INVESTMENTS WE DO

MANAGE RISK AND RETURN

There are many risks involved in investments, all of which need to be integrated into your investment plan. Besides the normal asset class risks, we also look at:

Inflation Risk – unless your money grows at least as much as inflation does, you will not be able to buy as much next year as you did this year. So a savings account with a 4% return is actually a risk to your long term ability to afford your needs.
Tax Risk – the tax laws change each year. So good advice 10 years ago may not be good advice today. You need someone who knows how the tax changes will impact your affairs. Otherwise, you will pay more tax which impacts how much you get to spend down the line.
Concentration Risk – if your investments are all in one asset (e.g. property or your company’s shares), you expose yourself to concentration risk.
Country and Currency Risk – is a challenge globally. The political impact on currency and debt rates can significantly affect what you get to spend in retirement.
Timing Risk – two people with the same money at retirement will have a very different experience if one begins drawing down in a growing economy and another in a shrinking economy.

MATCH YOUR RISK

Each of us thinks differently. Two people can view the exact same investment completely differently – one understands it and therefore doesn’t see it as a risk, and the other thinks it’s exceptionally risky.

Our approach looks at you as an individual – and if you have a partner, we look at the gap between their risk profile and thinking style, and yours.

Your risk profile involves three key elements

Finacial Risk Tolerance – as assessed by the Finametrica assessment
Risk Capacity – how much you can afford to lose. If Warren Buffett loses $100,000 or you lose $100,000, it will more than likely make more of an impact on your retirement plan than his
Risk Need – if you are well on track with your plan, and already have enough money, you need to take less risk and less return than someone who may need higher growth rates in order to ensure they can retire.

We assess all of these together to come up with an optimal risk profile for you, and then match that to the investments we make together.

TRACK RISK, RETURN AND FEES

Every decision is made with the best information available at the time. But the world changes. An asset that seemed low risk (bonds) may have a different risk profile as the market changes (and banks fail). A fund that performed well over the last 5-10 years may get a new manager that has a different approach. Your life circumstances may change.

So a big part of our investment philosophy is the continuous tracking of risk, return and fees that the underlying investments charge. We do not believe in continuously changing your investments – each change comes at a cost. We believe in making sure that we’re always within the guard rails of your plan. And if a change is needed, we’ll act.