Evolving to match your lifestyle changes
Your reasons for saving can change over time. Early in your career, the focus may be on buying a new car or saving for a house. By mid-career, it may be saving for your children’s education. And as you approach the end of your career, the priority is likely saving for retirement.
Your Silver Thatch Pension Plan recognizes that your needs and goals are not static. It also recognizes that your tolerance for investment risk can change over time. That’s why the plan provides three different investment portfolios – each designed to reflect where you are in the life cycle. These include the:
- Growth portfolio: a higher-risk mix of investments made up of 70% equities, 18% bonds, 9% alternative investments, and 3% cash;
- Balanced portfolio: a medium-risk mix of investments consisting of 45% equities, 41% bonds, 11% alternative investments, and 3% cash; and
- Conservative portfolio: a lower-risk mix of investments made up of 65% bonds, 19% equities, 13% alternative investments, and 3% cash
The basic contributions made by you and your employer are invested automatically in one (or two) of these investment portfolios based on your age, income range and marital status. Even better, your savings are shifted automatically from one portfolio to the next as your circumstances change. For example:
- If you are a married employee earning $50,000, we’ll start shifting your savings from the Balanced portfolio to the Conservative portfolio once you turn 60.
- If you are a 30-year-old, married employee and get a raise that pushes your income above $40,000, we’ll start shifting your savings from the Balanced portfolio to the Growth portfolio.
- If you are a 26-year-old single employee earning $27,000, we’ll start shifting your savings from the Growth portfolio to the Balanced portfolio if you get married.
The transfer of savings from one investment portfolio to the next typically takes place over an 18-month period. This gradual transition helps to avoid large and unexpected changes in the value of your investments.