Question: “What type of investment withdrawals will you be making?”
Once we've determined the basic asset mix based on the client's investment timeframe, we can adjust it based on how the money is going to be withdrawn from the account. Here are Credential’s guidelines:
If the money is to be withdrawn as a systematic
withdrawal, the equity Investments that are based on stocks and securities.
portion of the Asset Mix should be increased by 5%. (A systematic withdrawal
is when the money is withdrawn over an extended timeframe, equal to half
or more of the investment timeframe.)
If the intended use of the money is for a single purchase such as a vacation or a new car and the investment is to be withdrawn as a lump sum, the asset mix should not be adjusted.
|
Planned Use of Money |
Adjustment to Basic Asset Mix |
|
|
Income |
Equity | |
|
Systematic Withdrawal |
-5% |
+5% |
|
Lump Sum Withdrawal |
no change |
no change |
There are two more possible adjustments to the basic asset mix: