Episode 43 - How to make your money last forever
Are you worried that you will run out of money when you stop work?
In this episode of the #mastersoffinancepodcast we delve into how to make your portfolio last longer and ride out any periods of negative returns.
We explore the idea that the sequence of the returns experienced by your portfolio has a huge impact on how long your money will last and what has been considered as the safe amount you can withdraw to try and avoid running out of money.
We have also spent many years researching and creating a strategy to limit the impacts of the risks with negative returns in the early years of retirement which we discuss along with a real world example of how this worked through the Global Financial Crisis of 2007-2009. Have a listen.
To look at the example data we used for our comparison of portfolio A & B when comparing the impacts of sequence of returns, head over to https://creativeplanning.com/blog/never-enough/ where Ryan Swarts of Creative Planning has a great blog post on the subject along with the example.
For more podcasts, blog posts and videos, head over to www.moranfp.com.au
Alex Hont 0:20
Welcome to this episode of the masters of finance podcast. Today Chris and I are going to be talking about sequence of return risk and thinking about what is it, we're also going to look at what's a safe withdrawal rate from a portfolio and why that matters. Look through some examples of how sequence of return risk can impact portfolios and at the end, stay tuned because we're going to cover off some of the things you can do to try and mitigate or reduce the impact of and make sure your portfolio lasts a bit longer. Have a listen.
Chris Haggart 0:47
Chris Haggart and Alex Hont are authorized representatives of Moran Partners Financial Planning, any opinions expressed in this podcast are solely our own and do not reflect the opinions or views of Moran Partners Financial Planning or any entity we are associated with. This podcast is for informational purposes only and should not be used for or doesn't constitute investment advice.
Alex Hont 1:07
Okay Chris. Welcome back to another episode of the masters of finance podcast.
Chris Haggart 1:12
Morning everyone welcome back, how are you mate?
Alex Hont 1:15
I'm well thank you. We did have our little office Christmas party yesterday and everyones looking a bit sprightly.
Chris Haggart 1:21
Yeah, it was good it's nice to have the afternoon off and have a bit of a relax and just have a chat was good.
Alex Hont 1:28
Yeah and not talk about work stuff so much.
Chris Haggart 1:30
Yeah, it was good. Yeah. Partners were all there. So that tended to help it sort of breaks up the the office chat because invariably you would probably end up there. But, so does that make this our Christmas podcast?
Alex Hont 1:41
I reckon we'll try it, well probably does because I reckon this will come this will be the last one that comes out before Christmas. I reckon we might end up recording one before the Christmas break so that we've got enough content and podcast coming out over your summer. When you've got that you know, you listen to all the podcast cuz you're all that time and you're still waiting, you're still hanging on for all those others. What's that? Chris you better move your car.
Chris Haggart 2:01
Yeah, it's my move my car alarm. Sorry everyone.
Alex Hont 2:03
That'll have to wait. I was just gonna say very unprofessional of us Chris.
Chris Haggart 2:09
I wasn't expecting that to kick in so quickly. I was going to say yes whilst you're all holidaying,our you can listen to our dulcet tones about all the financial things impacting your life.
Alex Hont 2:20
I promise I'll get Chris more excited so that it's you know, it feels like a festive summer break.
Chris Haggart 2:26
That Yeah, well, Merry Christmas to everyone. Happy Holidays. Hope you're all traveling safely, spending some time with family.
Alex Hont 2:33
And getting a bit of a break from work.
Chris Haggart 2:35
Exactly. Right. That's what I'll be looking forward to a bit of removal of myself from the world?
Alex Hont 2:41
Yeah, that sounds fun. But let's get down to business Chris. What is happening today on the podcast?
Chris Haggart 2:48
It's a topic I think it's pretty important especially for those who have either just retired or are relatively close to retirement something definitely to consider and it's we call sequence of return risk.
Alex Hont 3:04
Sequence of return risks. It's a lot of words that don't mean a lot to most people when you put them together like that, but let's let's start by defining it. So, sequence of return risk is really the danger that the timing of your withdrawals or from super, and the returns that you generate have a negative impact on the balance, now that that, let's put that in simple terms. What we're saying is when you start retirement and you start drawing out income or drawing money out from your investment portfolio, the returns that you get in those first few years have a huge impact on how long your portfolio is going to last. Right? So I know it sounds obvious, but if you have negative returns, it's going to, it's not going to last very long, positive returns, it's going to last a lot longer.
Chris Haggart 3:54
I guess the key differential here is that this is the first time that your portfolio will see rather than having additions or accumulation of return like compound, the compounding effect, you actually start withdrawing funds from your, your pot. And so if you if you run into three or four or however many years of negative returns whilst you're actually withdrawing from it, rather than adding to it, that has a has a big impact.
Alex Hont 4:25
So let's focus on a couple of key points in this, this topic. And the first one, let's focus on is the withdrawal, rate and then I want to go back to this idea of the sequence. Yep. And, and these these two things have play a big part in the outcome of how long portfolios how long your retirement assets are gonna last. Now, just for what we're talking about today. We're not taking into account the the aged pension. So you know, if you run out of money in Australia, you would be entitled to an aged pension once you're over aged pension age, right? So we're just going to disregard that because this is really around managing portfolios rather than that your overall cash position, but so just bear that in mind. So let's go with the withdrawal rate. There was a study done by a guy named Bill Bengen in 1994, which was published in the Journal of financial planning and he identified that 4% of your account balance is the safe withdrawal rate.
Chris Haggart 5:17
Yep. So typically, this is what most planners will work off just to sort of say, you can take 4% from your portfolio every year without making or having significant detriment to your long term, I guess asset, asset positional or asset longevity.
Alex Hont 5:39
Yeah and so it's basically whatever your income is that you need. You need 25 times that in terms of capital balance. Yeah. Which is a lot right, it is a lot.
Chris Haggart 5:50
And for some people, you might not be able to get there, like it just physically might not be possible given your proximity to retirement, how much you've already got, how much have you saved already? So, you know for I think for some people it can be if you're working strictly off this formula, it can be a bit a bit daunting.
Alex Hont 6:10
Yeah. And now when, when Bill was calculating this, he did, he didn't nominate a rate of 4% because he wanted to account for things like inflation. And we know that inflation erodes the value of money over time. And therefore we need to be generating a high, this is not the rate rate of return that we're getting on the portfolio by the way, this is just the rate of withdrawal.
Chris Haggart 6:31
And that's yeah, that's something that I think gets confused quite often when we have this discussion with clients is sort of we're saying, well, we can withdraw or generate a rate of return. That's X percent, let's call it four. And then I think the what people hear from that is, you know, we're going to get a 4% return, which doesn't seem fantastic, but what we're just talking about the, the withdrawal perspective.
Alex Hont 6:57
Yeah, yeah. And the other thing, and yes, so when we're looking at withdrawal rates and and inflation, if we if inflation is running at 2%, for example, and we're withdrawing 4% from the account, that means we're breaking even every year, right? If we can, if we can generate a 6% return, yep. Right. So, so that's covering the effect of inflation correct. Now, depending on where your portfolio sits on the asset allocation, you know, growth defensive spectrum, you know, how much you've got allocated to shares and property versus how much you've got allocated to cash in term deposits or similar investments will depend on the kind of the long term expected return, you're going to get what you expect to get over a period of time of usually we'd like to look at five years or longer.
Chris Haggart 7:43
So through what we would typically call the investment cycle or economic cycle.
Alex Hont 7:48
So we would still hope to get more than six, probably on some of the balanced or more aggressive portfolios over time.
Chris Haggart 7:54
Yeah, definitely. I think we we both operate in the fact that we'd rather under under assume or underestimate and then in reality, the like, if we look at the 10 year returns from this point backwards, I know it's a bit skewed because it's, we at this point, if we go back 10 years, we're picking the bottom of the financial crisis. So things are going to look good. But like, say a balanced portfolio is looking at around 10% annualised. Yeah, somewhere around there.
Alex Hont 8:23
somewhere between eight and 10 I reckon. And yeah, as you said, you're picking that period if it even if you go back over longer periods, you probably in that ballpark between sort of seven and nine more often than not.
Chris Haggart 8:33
Yeah, and whereas we're talking about six is here, so you know, we would like to under under assume.
Alex Hont 8:38
Yeah, so that 4% safe withdrawal rate also in Bill Bengen's research was to try and account for the sequence of return risk, right, and and it comes back to the, now let's get back to the other part about the sequence. Alright, so we've got an example in front of us which we will put in the show notes and that, you can look at which shows two portfolios, a and b, starting with a balance of $100,000 each, now these, in this particular example, with these are not our numbers, these are someone else's. So they've picked $5,000 a year as their withdrawal rate so a 5% withdrawal rate from the starting balance not not not adjusting every year, just withdrawing $5,000 every year. They've got 25 years worth of returns and what they've done is in one portfolio, they've got them starting from year, from year zero get down to year 25. At portfolio a and portfolio b they've gone from year 25 to year zero so they've just changed the sequence and reversed the sequence. Both were the the returns over that period of time, have both averaged 6.8% per year and the standard deviations of these returns are 12.8%. It's the same data set it's just reversed the sequence.
Chris Haggart 9:50
I was gonna say for those who are mathematically minded out there like the the sum of all the returns divided by the number of years gives you the same average and obviously the variability is exactly the same because it's, as Alex just said it's the same data set. So there's no, no statistical difference between it's just the the when the returns land.
Alex Hont 10:12
So the key is exactly when the returns land in portfolio a, the first year, the first three years returns were minus 15% year one, and minus four year two, minus 10 year three, and including the 5% withdrawal, the $5,000 withdrawal rate, we are now the portfolio balance is now just under $61,000. So it's nearly a 40% reduction over those three years.
Chris Haggart 10:36
Which is huge, because you know, in this scenario, let's put a let's round this up so it's a bit more realistic. Let's say it's instead of 100,000, it's a million. Yeah. We're sitting with started with 1,000,000 and we're now sitting around about 600 after three years.
Alex Hont 10:51
Yeah, yeah. So it's a massive reduction, compare that with portfolio b, which now these are big returns that they've got in there for this example but year one was 22%. In the positive, year two was 8% positive and year three was 30% positive, right and the difference in the balance is at at the start of year four including drawdowns, the balance is 154,000. Let's call it $300. So it's been a nearly a 50% increase, right compared to a 40% reduction. Now I know that sounds silly when you think about it, yeah, one portfolio had three years of negative returns one portfolio had three years of great positive returns. But the point is that we're using the same return data over 25 years with the same average rate of return and let's go back, let's go to the other end now. Right? portfolio a that has those negative returns at the start but then it starts to turn around and they moved more towards those positive returns towards the end. Problem is they run out of money and year 19, right. Portfolio b, which had those positive returns at the start, but then has that starts to move towards those years where they have very poor returns towards the end still finishes the 25 years with a balance of 240,000. So they've gone up by 140,000.
Chris Haggart 12:04
That's a big difference, though, in terms of longevity too. One runs out at 19. Yeah. And one still has 240,000 left after 25 years. Yeah. So there's six years just in this projection plus, I think withdrawing $4,000 a year. You know, there's probably another 10, 15 years on that.
Alex Hont 12:26
Chris Haggart 12:27
Yep. So it makes a big difference.
Alex Hont 12:31
So the point we're trying to make is that those first few years of retirement, when you stop contributing, and you're drawing money out, have a huge impact on how long your money is going to last. In fact, any year, any years that you have really bad, a string of really bad years is always going to have a big impact.
Chris Haggart 12:49
There's a big risk there. So, for the retirees out there who are listening, this is something thats um is pretty important because we've all, I think we've all still got the financial crisis in the in the back of our heads because it was, what, 10 years ago. I don't think the the psychological aspects of that have necessarily left because every time there's a bit of a dip, these conversations arise, which is fair enough.
Alex Hont 13:15
Yeah, there's there's not a lot of she'll be right mate.
Chris Haggart 13:19
Yeah, exactly. Right. What happens when the when we fall 50 60% what we did 10 years ago, so it's, um, it's definitely a conversation that we internally within the office are very cognisant of.
Alex Hont 13:35
Yeah. So what do we see? Well, I mean, here's the here's some bad news, Chris. Around spending in retirement, is that what we see is that you're spending in retirement is probably at its highest, the years after you start, years after you stop work. So when you start drawing an income, right, so those first few years are probably when you're going to draw the most
Chris Haggart 13:56
Yep. And this ties in with the whole retirement clip, discussion that, you know, in a previous podcast that we've had with Paul way back around probably Episode 20 somewhere around there, but you know, you've been working all your life, you've got lots of free cash flow, kids have left the house, if you've had kids, you know, life's been pretty easy, then you finish work and all of a sudden you you're drawing and you're, you're, it's very difficult to just change your spending habits overnight.
Alex Hont 14:25
It is but also I think as you get a bit older, you you spend you go out a little bit less, you might not travel to the same degree as you would in those early years when you're fitter and healthier. You know, you're just not as you know, just get a bit older, it's a bit it gets a bit harder. So what we say is people spend a little bit less from probably the age of 60, down to about on to age 75. About age 75 where spending often bottoms Yeah, yep. And then once we get beyond 75 spending starts to increase again because there's higher medical bills and things associated with that.
Chris Haggart 14:59
But also associated with a lot of anxiety around, will my money last long enough? You know, my spending is going up, I can see my portfolio balance reducing. This is an issue. So you know, at this time when your spending starts to turn from the bottom, there's also a lot of financial anxiety that comes along with that.
Alex Hont 15:22
Yeah, yeah. So I guess this is leading to the perfect storm where you know, you, you don't want those negative returns in the early years of retirement, you're also withdrawing more often withdrawing more than spending more than you might in other years like that you will later on, to draw your balance down. So that's this, these first few years become pretty critical. And this idea of sequence of return risk is a real thing that can have a big impact on portfolios.
Chris Haggart 15:47
Definitely and look typically I think within the industry, the answer to that is to lower your risk profile.
Alex Hont 15:52
Yeah, so let's take take less risk.
Chris Haggart 15:54
Yep. Which means you know, where there's less likelihood of the fact that these portfolios are going to suffer, year runs of years of negative returns. Now what that then also means is that you're likely return figures also lower whilst you lower the risk of negative returns, you actually lower your overall risk. Now, if you're in a position where you've got an asset base that you can do that that's okay. But I would say the large majority of people don't.
Alex Hont 16:23
Yeah, and I think the problem is that we've still got 25 years, right, we've got this money's gonna last for 25 years. And there's a big difference if we're only getting 4% return versus 6% return, that might not sound huge, but in terms of the longevity of the money, even that difference is massive.
Chris Haggart 16:38
Yeah well again, as Al mentioned at the start of the podcast, inflation is never going to go away. So you know that that the value of that although you're say earning for and drawing for you're actually going backwards at two and a half to 3% a year, which reduces your options later in life.
Alex Hont 16:55
Yeah. So what can we do about this Chris? We've just spent the last 15 minutes talking about how big a problem this is for retirees. How do we fix it?
Chris Haggart 17:04
Yeah. So it really, your retirement is all about income generation.
Alex Hont 17:08
That's right. Oh, wait, hold on. Wait a sec. Say that again, Chris.
Chris Haggart 17:11
Retirement is all about income generation.
Alex Hont 17:15
That's right. I'll be waiting to use that a bit more often. But anyway, so we got one in. Income generation, because we need income to spend. I mean, that's not everybody's view, and not not certainly not say an industry super funds view, because they run on unitized funds. Yeah, right and with a unitized approach, where you have units in an investment, every time you need income, you have to sell units. So that's great when markets are when unit prices are high, you don't have to sell too many units. But the problem is when we see times of market stress, when we get those periods of negative returns and the unit prices compress or go down. You have to sell more units for the same amount of cash. Right, right. And what's the problem the problem with that is then you your every time all throughout your retirement your unit balancing will be decreasing all the time, you will always have less units because you're selling them to pay pensions.
Chris Haggart 18:07
Correct. So no matter at the at the start of your retirement, your pot is 100,000 units, a hundred thousand units, whatever happens to be, and each unit has a proportional make up of the underlying investment mix. Yeah. And as Al said, every time you, you make a pension payment you need to sell a certain number of units to to fund your income. So you're selling capital and, and income. And then so we go through a period where we're seeing the balance of those units fall because the underlying investments are falling. Well, naturally you're gonna have to sell more units in order to fund the same level of income that you're currently drawing.
Alex Hont 18:49
The other problem with the unitized, the thing is when, when asset prices, doesn't matter, units asset prices share prices doesn't matter what they are, when something falls by let's say something falls 30%, right, in value, it needs to go back up by 50%. To get back to you, where you were, right. And I know that sounds silly. But if you did the math and said, if you know, if $100, your balance is $100 and it fell to $66, you know, you've lost a third of the of its value, to get back to $100, that $66 has to go up by 50% of 66. To get back to the hundred, I'm talking random numbers here. So don't pull me up on my decimal points.
Chris Haggart 19:31
But it's a different magnitude.
Alex Hont 19:33
Same with the unit prices, right? So you know, same thing, if you're selling units at $66, you've got a lot less units, and they have to go up by 50% to get back to where they were previously.
Chris Haggart 19:41
Correct. Because remember that you started out with a set number of units. So the more you're selling, the harder it is for you to get back to where you were.
Alex Hont 19:49
And you're not buying more units because you're not putting more money in. correct, right. Yeah. So So how does that different from our cash flow matching approach?
Chris Haggart 19:57
Very in the sense that rather than taking a unitized approach, do you have a portfolio and the design of the portfolio is to generate the income that you will will withdraw on a yearly basis?
Alex Hont 20:11
Yeah. So the point of this is to actually never sell investments, not not never. But you know, the idea is we create a portfolio with investments that pay regular distributions. And we're never having to sell units in times of market stress, because we're, we're harvesting the cash, the dividends, the distributions that these things are throwing off, to pay for your living expenses to meet your withdrawal, withdraw needs.
Chris Haggart 20:38
Yeah, correct. And it just means that we have more options, more control over the portfolio, so that if we're going through a tough period, well we know it's probably not the best time to sell, whereas if we're going through a good period, you know, whether we sell or not, is sort of, I guess, up up to the fact that, you know, what do you need from your perspective and what do we think's best long term. It just means that we have control over what we're buying and selling versus the other option where you're just basically forced to sell constantly.
Alex Hont 21:08
I want to run through an example of, of one particular stock. And this isn't by no means a recommendation. This is only an example. And it's a historical one, and it goes back to the GFC. And I just wanted to illustrate the point that we can't we can't solve the problem of sequence of return risk, but using this approach we can certainly limit the the limit limit the damage and the downsides. So Chris, do you mind pulling up the Westpac share price, through May, let's say the period of let's 2004 through to 2012. And if anyone remembers, I'm sure lots of people remember 2007 through to 2009 we had the global financial crisis as it's called, where share prices, you know, share markets dropped in the order of 30-40% and listed property dropped the order of 50 to 60%.
Chris Haggart 21:57
Yeah, correct. So we took if you're a in a typical portfolio, you've taken a battering.
Alex Hont 22:02
Yeah. So let's just look at the share pricing about to that sometime in 2004 Chris.
Chris Haggart 22:06
All right, so I've pulled up first of November 2004, to the first of October 2012. So those of you who wish to, you could go to say yahoo finance or google finance and put in Westpac and pull up this date range. As of the first of November 2004, I've got a Westpac value sitting at $19 and 36 cents. And then if I look say around two
Alex Hont 22:34
First, let's look at let's look at the start. Let's look at the peak. Let's look at the bottom. And then let's look at the end of that period for share prices. So we start at $19.
Chris Haggart 22:45
And then we made our way up to the peak, which was obviously in 2007. And Westpac was at $28.14. So we've gone from $19 to $28. Yep, come down to sort of what is it March 2009 or something like that.
March, 2009, Westpac is worth $18 96.
Alex Hont 23:05
So we're only $1 off where we started interestingly, after one of the worst falls in markets, right over that period of time. And where do we finish in in 2012.
Chris Haggart 23:16
2012. We're at $25.34.
Alex Hont 23:20
So we've, over that period of time holding Westpac, we've made money on this on the price. But but what's interesting to note is that it went up by more than $10. It came back down, and then it sort of evened out to where, you know, to, to a level that was probably more realistic in terms of growth over that period of time.
Chris Haggart 23:38
Yeah, correct. And if you draw a line from start to finish, there's a nicely sloping trend line upwards. And then obviously, the the highs and lows around that yep.
Alex Hont 23:48
But if you looked at the percentage change over that period of time, so we've gone we've probably gone up by 50%, more or less
Chris Haggart 23:54
gone 25 to 18
Alex Hont 23:56
or we've gone 19 to 19 to the peak we went from 19 to 28. So let's just call it about a 50%. increase. Yeah. We went from
Chris Haggart 24:06
28 to 16.
Alex Hont 24:07
28 to 16. Which is nearly having.
Chris Haggart 24:13
Yeah, correct. Yeah.
Alex Hont 24:13
Right. So nearly a 50%, we'll call it a 45% fall in the share price.
Chris Haggart 24:18
Yep. And then back up to 25
Alex Hont 24:20
and back up to 25. So, and we came out with another, so it's another 30% on top of that 16 or thereabouts. So, it swung around wildly during this period of time, what happened with the dividend because this is the bit that I think is really powerful is that we look at the dividends that come out every six months. All right, and and I'm not looking at the rate, I'm just looking at how steady they were.
Chris Haggart 24:43
So 2004, 44 cents, and then 49, 51, 56, 60, 63
Alex Hont 24:53
So where are we at? Let's Let's go at the peak where what's the dividends at the peak Chris?
Chris Haggart 24:58
Alex Hont 25:00
Okay, that's when markets started falling after that point.
Chris Haggart 25:03
Well markets had just started falling. So it was the May 2007 was 63 cents. Yeah. And what's that? That's November 2007. It was 68 cents. And so we just gone over the peak at that point.
Alex Hont 25:18
Okay, what's the next one?
Chris Haggart 25:19
The next one was 70 cents.
Alex Hont 25:21
So markets are falling and the dividend is still going up.
Chris Haggart 25:23
The world is currently ending. Yep. And then the next one, which is May 2008, where we're almost at the bottom of the world ending, we went from 70 cents to 72 cents.
Alex Hont 25:35
So we've still got a higher we've still got our cash flows, cash flow's still maintained during this period of time.
Chris Haggart 25:39
Yep. So we've now bottomed on the share price and the dividend after that went to 56 cents.
Alex Hont 25:46
Okay, so, it took a while, but we did say a dropping in the dividend of in the order of we looked at it over about a year when you putting these things together
Chris Haggart 25:57
Alex Hont 25:58
was about 24 somewhere between 22 and 24% so there is a reduction in your income over this period. But ok what happens after that Chris?
Chris Haggart 26:04
Six months later, we went from 56 was the low. So let's go pretty much at the bottom 72 cents, which is as high as it had been. I can't see a dividend that was lower higher than that. Sorry, prior to that, yeah, then 56. So that's our big drop and then so six months later, just 12 months after the high dividend, we're back to 60 cents. Yeah. And then and then the next one, 65.
Alex Hont 26:29
Okay, and then the next one?
Chris Haggart 26:30
Alex Hont 26:31
So it took three dividends, you know, 18 months before for our income to recover. Yep. Alright, if we didn't sell any of those shares in that period of time, yes, we would have taken a bit of a hit on income at that period of time, which is not completely unexpected given the, given what happened, correct. Right. And but at the end of the period of that period of time, our income is back above where it was at the beginning. Where it was before the crash, and the share price is higher than where it was before the crash. So the point I'm trying to make is that even though we had some horrible periods of return during that, over that period of time, if you didn't sell the shares, you would have collected nearly, you know, nearly enough income along the way to meet all your living expenses, and come out the other side, still holding on to just as many shares as you started with that are worth more than when we started.
Chris Haggart 27:19
Yeah, correct. And I think the key thing is here that, you know, you build a diversified portfolio with a number of stocks all around the world in different sectors, both, as I said, here and globally. And although that was a fairly synchronized fall, from a price perspective, there's still the ability to generate the income that you need to draw.
Alex Hont 27:40
Yeah. So we, you know, that was what a really tough period of time to be in the advice business, and all of, you know, all of our clients were saying, what do we do, what do we do and we said, look, modern portfolio theory, or conventional portfolio theory says don't sell Yep. And anyone who didn't sell has come out the other side with more money than what they started with when we're looking at dividends. Right, the inclusion of dividends, not just Westpac but in other shares as well. Whereas I know that there were, that one of the industry funds let slip that one of their, the time that they had the biggest movement from their investment options to cash was about March 2009, which is exactly exactly the bottom bottom of that of where the markets were, which was the worst time to come out. And anyone who did that would have actually realized those big losses, especially in terms of unit prices, where you've had to sell units to convert them to cash. So our cash flow matching approach is not foolproof. As we said, we're not, you can't avoid negative returns if you want to get that higher rate of return long term. But it is one way to reduce the impact of those big falls in markets.
Chris Haggart 28:47
And what this does is it means we don't have to, while we we still may wish to if it suits your personal circumstances, but we don't necessarily need to go really defensive on the overall portfolio to try and avoid the sequence of return risk. So it as I think Al has said, you know, there's, it's a way to mitigate some of the more conventional approaches. So that you have more options and, and, and more money in the longer term.
Alex Hont 29:21
Now, we've put a lot of time and effort over probably nearly a decade into building these portfolios and building out how they work and why they work the way they work. So if you've got any interest, or you're worried about your balance, and you're worried about these sorts of events, we have a solution that might help.
Chris Haggart 29:37
Yeah, exactly right. <