Retirement Income Planning: The Perennial Income Model™
Learn about our commonsense approach to managing your investments during retirement that matches your current investments with future income needs to provide reliable income.
A proprietary process for investing
The Perennial Income Model's beginning
of retired families guided through every market since
Our unique and proprietary process, “The Perennial Income Model,” is an investment plan that protects retirees’ current income from stock market volatility while at the same time protects future income from the subtle yet devastating effects of inflation.
Your income now
Protected from stock market volatility.
Your income later
Protected from the subtle yet devastating effects of inflation.
How does The Perennial Income Model work?
Simply put, the Perennial Income Model matches the retiree’s investments with their future income needs.
The early years
Retirees can't afford to lose money because they are forced to sell stocks at a loss to provide monthly income.
The later years
Retirees can't afford to not keep up with inflation by avoiding stocks altogether.
separate investment portfolios
years of income per segment
years of retirement covered
Years of retirement
Segment One
Years 1–5 · Safety of principal
Segment One is where the retiree would draw income from for the first five years of retirement. Stock market volatility is the greatest threat to the early income producing requirements of this segment. Therefore, safety of principal is the primary investment objective of Segment One.
Segment Two
Years 6–10 · A conservative portfolio
Segment Two will not need to be tapped for income until year six. So while Segment One is providing income for the first five years of retirement, Segment Two is growing in a conservative portfolio.
Segment Three
Years 11–15 · Slightly more aggressive
Because Segment Three won’t be needed until year ten, it can be invested in a slightly more aggressively managed portfolio than Segment Two.
Other Segments
Years 16–30 · Incrementally more aggressive
Segments Four, Five, and Six are invested in incrementally more aggressive portfolios because they will not be responsible to provide income for another fifteen, twenty, and twenty-five years. The greatest threat to the later years of retirement is inflation and even though stocks at times cause anxiety because of short-term volatility, stocks do provide a hedge against inflation in the long-run. Short-term volatility is inconsequential for investment portfolios that will not be needed for fifteen, twenty, or even twenty-five years in the future.
Years 1–5
Safety of principal
Years of retirement
Each portfolio is dedicated to provide income for a five-year segment of retirement, six portfolios, thirty years covered.
Harvesting to protect retirement income
The Perennial Income Model is a goal-driven investment program. Once the investment objective is reached for a specific segment then it is recommended that the investments associated with that segment be invested more conservatively, we refer to this as harvesting.
One segment’s journey to its goal
Segment Five · illustrative only- 1
Invested for growth, Segment Five averages a 9% return instead of the projected 7%.
- 2
It meets its $300,000 goal in year sixteen versus year twenty-one, five years early.
- 3
The gains are harvested: transferred to a conservative portfolio, locking them in.
The Perennial Income Model's top priority is not to ignore risk and maximize investment returns, its primary purpose is to provide a predictable inflation-adjusted stream of income to the retiree with the least amount of risk.
Why the Perennial Income Model?
Time-segmented investing is appealing because it is logical, it is goal-based, and its success is not contingent upon guessing the short-term direction of the economy or the stock market.
Why you are invested the way you are, every dollar has a purpose.
When you will need a specific portion of your investments to provide income.
How your dollars need to be invested to accomplish each five-year segment's goals.
Because we have the Perennial Income Model, we are able to look at the big-picture of your retirement and successfully coordinate:
- Your investments
- Social Security benefits
- Pensions
- Other income
- Healthcare costs
…all while creating income in the most tax-efficient way.
The Perennial Income Model provides retirees with peace of mind: a consistent flow of inflation-adjusted income throughout retirement with the least possible risk.
In a world where few retirees have any formal retirement income plan at all, we are grateful and pleased to be able to share the Perennial Income Model with you.
Want to learn how the Perennial Income Model can work for your retirement?
Find out more in our What We Do section, or watch our webinar.