Strategy
Income-Engineered Portfolios
A ~6% income sleeve so you never sell stock at the wrong time.
The biggest risk in retirement isn't running out of money. It's being forced to sell stock during a downturn because that's where the income has to come from. The fix is to build the income separately from the growth.
How a 6% sleeve is assembled
6.0%
Total cash yield
About $60,000 a year on a $1M sleeve, before touching principal.
Illustrative mix. The layers and weights are engineered to your cash need and risk, and yields move.
- 01
The play
Layer the income sleeve from dividend-paying equities, preferred stock, private credit, and select alternatives that throw off cash. Target roughly 6% in income yield on the sleeve, high enough to cover most clients' withdrawal needs without dipping into principal. The growth sleeve runs separately, compounding undisturbed, until rebalancing windows open it back up.
- 02
Worked example
On a $1M portfolio with a $40K annual withdrawal need: a 50/50 split between growth and income, with the income sleeve yielding 6%, throws off $30K in cash per year. The remaining $10K is covered through measured rebalancing across the growth sleeve. In a 20% market drawdown, no stock has to be sold to meet income. The cash distributions continue.
- 03
Who it works for
Retirees and pre-retirees within five years of retirement. Anyone whose current 'income plan' is to sell whatever's up. Investors who want the math of their retirement to work in bad years, not just good ones.
Common questions
Does this sacrifice growth?
There's a real trade-off between income-tilt and total return. We size the income sleeve to your actual need, not larger, so the rest of the portfolio compounds normally.
What if my withdrawal need exceeds 6%?
We'd flag that in planning. Income sleeves work best at withdrawal rates the portfolio can sustain; above that, the conversation shifts to longevity risk and spending discipline.
Is this just dividend investing dressed up?
Dividends are one ingredient. The sleeve also pulls from preferred stock, private credit, and selectively from alternatives, components most dividend strategies don't touch.
Related
Adjacent work that often runs alongside this.
Service
Retirement Income Planning →
Income that shows up whether the market is up or down.
Service
Wealth & Investment Management →
Active portfolios at institutional expense.
Strategy
Direct Indexing →
Indexing that harvests losses for years, not minutes.
Strategy
Private Credit →
Yield without the duration risk of long bonds.
Most clients leave their first call with something their last advisor never gave them: a plan.
Thirty minutes. No prep needed. We'll walk through your situation and tell you what we'd do differently.