Maximising savings in the lead up to

retirement

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Chris, 58 years

 

Meet Chris

Chris still has some years to go until retirement and his savings are growing nicely, thanks to his success with recent sharemarket investments. As he approaches retirement, he would like to adapt his investment strategy to be a little more conservative, so his future retirement savings and income won’t be as vulnerable to market downturns.

Chris is 58 and working full-time. He plans to retire at 65. He has $450,000 in his super and an additional $200,000 invested in Australian shares.

 

The strategy

Protect future returns and limit losses with sharemarket protection

Chris’s adviser suggests investing $75,000 into Allianz Retire+ Future Safe to protect a portion of his sharemarket portfolio. He can keep investing in shares as a core part of his investment strategy in the lead up to retirement, and still have peace of mind that any losses will be limited. As he is still working, he is confortable that Future Safe is designed to be held for 7 years.
 

5 key steps

Chris works with his adviser through 5 key steps to:

Step 1: Understand his retirement goals
Chris’s main retirement objective is to limit the impact of sharemarket losses as he approaches retirement.

Step 2: Decide his worst-case scenario and choose his protection option
Chris chooses a Floor of -10% as he still has a few years to go until retirement. He knows he can choose a different Floor on his anniversary date, and has the option to limit market losses to 0% if he wants (before the annual product fee and applicable taxes). The -10% Floor option also offers Chris the highest Cap (the maximum amount he can gain if the sharemarket rises), so he can maximise potential returns.

Step 3: Choose an investment option and amount
Chris decides to invest $75,000 in the domestic equity index-linked option. He funds his investment by selling a portion of his existing share portfolio, using some capital losses to offset capital gains from the sale.

Step 4: Access or reinvest his money
As Chris is still earning a full-time income, he doesn’t make withdrawals from his Future Safe policy. He decides to reinvest his investment returns each year.

Step 5: Check in each year to review his strategy
Chris checks in with his adviser each year to make sure the Floor and Cap options continue to keep his overall investment returns and retirement savings on track.
 

For a detailed view of Chris' investment journey, please download the full version

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