Investment portfolio
Charles does not plan on spending much of his principal, but still wants his small nest egg to grow and support some of the incidentals he might encounter.
Preparing for retirement
Financially limited
Charles
Charles is a financially limited retiree and a moderate risk taker.
| age | life stage | salary | total assets | occupation |
|---|---|---|---|---|
| Charles is 68 | Retired | $0 | $400,000 | Benefit Administrator at a Health Care Facility |
Situation
Charles is a recent widower. A lot of his savings went towards his late wife's medical expenses.
Family
Charles lives a simple life. He lives in the house he's owned since he was 40. He has no children.
Goal
Any legacy will go to the North Carolina Conservation Society, as his late wife Linda loved nature.
Health
His plan is to move to a retirement home with an assisted living option in the next two years, just in case his health deteriorates.
Objectives
Charles prioritizes his retirement objectives as follows:
1
Concern about his care as he ages
2
Assurance that savings can last through his life and investments will out-pace inflation
Concerns
Retirement risks that are of greatest concern to Charles
Top concern
Inflation
Concern
Longevity
Concern
Cognitive
Charles' income plan
Charles has specific financial needs in order to be able to achieve his overall retirement goals. The following is an estimated amount of annual income* Charles believes he will need to achieve his retirement goals.
Basic needs
Housing, food, healthcare, emergency fund.
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Lifestyle
Incidentals.
Legacy
Legacy is not important to Charles, but he does want a buffer so that if the assisted living facility changes its annual fees, he is able to continue to live there.
*Income needs in terms of after-tax income.
Charles' investment strategy
Fixed annuity
Charles’ advisor explained that annuitization is essentially a "self-pension" that Charles could take advantage of to fund his essential needs and some of his desired expenses.
Investment portfolio
Charles is not very comfortable with risk and has decided to adopt a moderate conservative allocation aimed towards generating income.
Resulting income
Hypothetical income approximations to maintain $42,000 of annual income
Displayed in real dollars to show income maintains the customer's buying power throughout retirement (30-35 years). The composition of income received in retirement is purely hypothetical, for illustrative purpose only.
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