So much of financial literature concentrates on how to save and accumulate assets and wealth.

Then you retire. Now those assets need to generate income to replace the income you earned while working. So now what do you do?

For our retired clients that look to their portfolio as a source of income, we put in place what we call ‘The Paycheque Strategy’.

Some of our clients depend on their investment portfolio to provide some, the majority, or all of their retirement income. Other clients just want to draw supplemental cashflow for travel, classes or other activities.

So the first step is to uncover each individual client’s cashflow needs.

The next step is to ensure that anywhere between three and five years of required income is set aside, liquidated, out of the market. That is, we want to know there are three to five years’ worth of reliable ‘paycheques’ available to meet our clients’ income needs.  That allows the balance of the portfolio to grow. If the markets (when the markets) experience a correction, calm minds may prevail as we know the cashflow needed for upcoming expenses or spending plans is safe, available, and immune to these fluctuations.

No need to sell off equities! There will always be an unpredictable component to equity investments despite the long term nature for them to create growth and protect against inflation. Over any given short period of time these will swing – positively or negatively. While there are many pundits who try to predict the direction, nobody has the crystal ball to tell you when the markets will go up or when they’ll drop.

We’ve found over the last 15 plus years that ‘The Paycheque Strategy’ provides a wonderful sense of calm, ease and assurance knowing the money you need is there for you, unaffected by the ups and downs of the market.

Have you thought about how much income you’ll need in retirement, and what sources of income will make up that paycheque? I’m curious! Let me know your answer in a comment through our Contact Us page.