“I’ve been pretty fortunate with my personal investments, even though some of them have been pretty risky,” says 53-year-old Jason. “I’m planning to use my pension funds for Variable Benefit payments when I retire. Lately, I’ve been thinking that maybe I should be moving at least some of my pension funds into lower-risk investments. When I looked at the Money Market and Bond Funds, it seemed like a good opportunity to do just that.
However, when I utilized the online Risk Tolerance Estimator tool on the CSS website, the result suggested that I’m a growth investor and that I should consider an asset mix of 80% Balanced Fund and 20% Equity Fund. Not what I was expecting,” added Jason.
Jason discussed this result with his wife, Jessica, and together they met with a CSS Pension Plan Consultant to discuss Jason’s pension plan investments and the couple’s retirement plans.
“Although retirement at 55 is quite appealing, I don’t think I’ll be retiring before I’m 62 at the earliest. I’m particularly interested in growing my Plan assets to increase my likelihood of reaching my retirement savings goal by 62. Also, at my age, I think I should probably be reducing the risk in my investments - I am currently invested mostly in the Equity Fund,” he revealed.
The Pension Plan Consultant worked with Jason and Jessica to help them understand that their investment horizon was still long, as it included about nine more years of Jason working. And, Jason’s responses to the questions in the Risk Tolerance Estimator revealed that investment growth was important to him to be able to reach his retirement income goals, and that he was willing and able to bear investment risk in pursuit of higher investment returns.
“When we really thought about it, nine years is a pretty long time to have the bulk of my retirement savings invested in funds with a lower risk/return profile, especially since I’m still a little way away from my retirement savings goal. I may consider allocating some of my pension funds to the Plan’s lower-risk funds again when I’m closer to my retirement age, maybe when I’m 58, but for now, 80% in the Balanced Fund and 20% in the Equity Fund provides me with the potential for growth I’m looking for at a level of risk that I can manage. It turns out the result of the Risk Tolerance Estimator was appropriate for me after all,” Jason concluded.
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