Case study regular income
Dave and Brenda need regular income
Dave and Brenda are financially
independent retirees who rely on income from their investments to
cover all their living expenses.
'We both have account-based pensions from our
super funds and they are our main source of income,' says Dave.
'Then we have a range of other income-producing assets including a small
investment property, a range of shares paying fully franked dividends and some
Dave and Brenda say they have a simple reason for spreading
their investments across a range of sources and asset types.
'Even though we invest for income, we also want our capital to
last as long as possible. That's why we invest in some growth assets despite the risks
Even their account-based pensions are market-linked. This means there is a risk
that the capital value of their pension will fall now and again.
They plan to cope by taking out a bit less each month until the
market picks up.
'That's why we have income-producing investments in other asset
classes such as property and bonds too. They're our backup and mean
we can spread our risk,' says Brenda.
'We don't feel comfortable with unlisted debentures and notes. There's always a
small chance the provider might stop allowing withdrawals for a
while if market conditions turn tough. I'm just not convinced you
can be sure that the interest payments will keep coming, especially
with some of those smaller debenture companies.'
Last updated: 18 Apr 2017