Mackenzie Monthly Income Portfolios Investor Guide

What you need to know about retirement income planning 

Moving into retirement is a huge step. Switching from investing for retirement to drawing income from retirement savings can be a stressful time for many. When you’re living on income from investments, rather than employment income, you come across new challenges. These include keeping up with inflation, not knowing how long your savings will have to last, a limited amount of income sources, and a volatile and uncertain investment landscape.

If you’re already retired or approaching retirement, it’s important to understand the challenges that come with generating consistent income from your retirement fund. Mackenzie Monthly Income Portfolios can help you overcome those challenges.

The new retirement reality calls for new retirement income planning

Canadians are living longer, and the retiree demographic is booming. However, many retirees don’t have a company pension plan, and government pensions don’t come close to covering retirement expenses. As a result, more and more Canadians have to be responsible for their retirement income.

With no employment income to fall back on, and a potentially long retirement, this new retirement reality means that retirees are vulnerable to the ups and downs of the market.

Whenever there’s high inflation, which causes the value of the dollar to erode, retirees struggle to maintain their purchasing power. Given how much retirement has changed, shouldn’t your retirement income planning change, too?

Weathering market crashes and sequence of returns risk

Market crashes happen, on average, every six years. You therefore need retirement income planning that helps your portfolio weather the storms so that your retirement plans aren’t derailed, or your income reduced.

Maximum drawdowns during previous market crashes

Market crashes can have a serious impact on retirees’ portfolios, particularly if you’re withdrawing funds to provide income. If your portfolio’s value falls sharply, it may not be able to withstand the same level of withdrawals. This is called sequence of returns risk and can be extremely problematic for retirees.

Investors who rely on their savings for retirement income and experience a market crash soon after retiring, could be faced with a tough choice. They could either see their savings dwindle or reduce their monthly income until markets recover. See our Investor Guide PDF for a detailed example of sequence of returns risk.

Avoiding sequence of returns risk and providing predictable income

Mackenzie Monthly Income Portfolios are specifically designed for retired investors who:

  • Are concerned about suffering sharp portfolio losses.
  • Need to be able to draw income from their portfolio.
  • Want some growth but with limited risk.

There are three different Monthly Income Portfolios available, each with a slightly different risk profile, and capable of fitting into modern retirement income planning. They’re purposely designed to provide higher growth and cash flow potential than guaranteed investment certificates (GICs) and better protection against market crashes than traditional balanced funds:

Favorable risk-return profile

How Mackenzie Monthly Income Portfolios achieve it:

  • They provide steady, predictable income, with a 4% monthly distribution (from dividends, bond yields and capital gains, plus a return of capital when needed).
  • They use sophisticated options strategies to reduce the risk from severe market crashes.
  • They benefit from carefully managed growth, containing a mix of stocks, high yield bonds and floating rate loans.
  • They’re managed by the Mackenzie Multi-Asset Strategies Team, whose members have experience at Canada’s largest and most sophisticated pension plans.

Are the Mackenzie Monthly Income Portfolios right for you?

Learn more about how Mackenzie Monthly Income Portfolios can help you reach your retirement goals. 

Talk to your advisor to learn more about how Mackenzie Monthly Income Portfolios could fit into your retirement portfolio.  

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The content of this brochure (including facts, views, opinions, recommendations, descriptions of or references to, products or securities) is not to be used or construed as investment advice, as an offer to sell or the solicitation of an offer to buy, or an endorsement, recommendation or sponsorship of any entity or security cited. Although we endeavour to ensure its accuracy and completeness, we assume no responsibility for any reliance upon it.

The payment of distributions is not guaranteed and may fluctuate. The payment of distributions should not be confused with a fund’s performance, rate of return or yield. If distributions paid by the fund are greater than the performance of the fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a fund, and income and dividends earned by a fund are taxable in your hands in the year they are paid. Your adjusted cost base will be reduced by the amount of any returns of capital. If your adjusted cost base goes below zero, you will have to pay capital gains tax on the amount below zero.