Case study regular income

Dave and Brenda need regular income

Couple wanting a regular income from investmentsDave 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 government bonds.'

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 attached.'

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.'

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Last updated: 18 Apr 2017