Smart Retirement Investing: How Braeside Wealth Uses Investment Layers to Protect Your Income and Grow Your Wealth

Written by Lance Swansbra

Building financial confidence in retirement

When you’re approaching or living in retirement, how you invest matters more than ever. You’ve worked hard to build your wealth, and now the goal shifts from simply growing it to using it, making sure your lifestyle is supported without taking unnecessary risks.

One of the biggest dangers retirees face is needing to sell growth assets like shares or property during a market downturn. At Braeside Wealth, we call that “timing risk”. It’s a situation where you might need cash for living expenses or a big purchase, but markets are down, and selling at a low point can cause lasting damage to your portfolio.

To protect against that, we use a layered investment approach built around three key components: cash, term deposits, and government bonds. Each plays a specific role in managing risk, providing income, and keeping your long term investment strategy on track.

Let’s look at how it works.

The challenge: balancing short term needs and long term goals

Most Australians understand the importance of diversification, not having all your eggs in one basket. But diversification isn’t just about having different asset classes like shares and property. It’s also about time diversification, investing parts of your money for different timeframes: short term needs, medium term stability, and long term growth.

Why? Because markets move in cycles. Shares and property can deliver great returns over time, but they’re volatile in the short term. If you’re forced to sell growth assets during a downturn just to pay for living expenses, you can lock in losses and reduce your future income potential.

That’s where our investment layering approach comes in.

Layer 1: Cash — your short term safety net

Cash is your first line of defence. It’s the money that sits ready for immediate spending and unexpected expenses. This might include:

• A bank or offset account you can access anytime

• A small buffer for one off costs like a new car, travel, or home maintenance

• Enough to cover your next 12 months of living expenses

At Braeside Wealth, we view this as your “sleep at night” money. It means that no matter what markets are doing, you’ve got funds to draw from without selling investments.

Cash doesn’t need to generate big returns, its purpose is to buy time. Having this buffer in place gives your long term investments space to recover when markets dip.

Layer 2: Term deposits and government bonds — steady income and stability

The second layer provides reliable income and stability over the medium term. It includes a mix of term deposits and government bonds, which pay predictable returns and have much less price volatility than shares or property.

This layer is designed to cover your spending needs for roughly two to five years ahead, acting as a bridge between your cash and your growth assets.

Here’s how it works in practice:

• Term deposits provide a fixed rate of return for a set period, ideal for income over the next few years.

• Government bonds add diversification and liquidity. They tend to perform well when share markets fall, giving you another defensive option.

With interest rates now at more sustainable levels, term deposits and bonds once again play a valuable role in generating steady income without taking on unnecessary risk.

Layer 3: Growth assets — your long term engine

The third layer includes shares and property, the growth engine of your portfolio. These assets are what help your wealth keep pace with inflation and support your lifestyle over the decades ahead.

Growth investments can be volatile, but their long term track record is strong. The key is structuring your portfolio so you don’t need to sell them in the short term. This allows your money to compound over time, which is how wealth is built and sustained in retirement.

By ensuring your short and medium term layers are well funded, we can give your growth assets time to recover after any market downturn, reducing stress and improving long term returns.

How the layers work together

Here’s a simple example. Say you’re retiring with $1 million invested and you need to draw $50,000 p.a. from your account. Your portfolio might be structured like this (for illustration purposes only):

• Cash: $50,000 — around one year of living expenses

• Term deposits and bonds: $200,000 — steady medium term income

• Growth assets: $750,000 — long term growth potential

Each year, you draw your income from the cash layer. Then, each year, we “refill” that cash bucket, ideally from interest, dividends, or by selling other assets.

If markets are strong, we might sell a small portion of your growth investments to top up cash. If markets are weak, we simply draw from term deposits and bonds instead, giving your shares and property time to recover.

It’s a simple but powerful system that balances stability and opportunity.

Why this approach is critical in retirement 

During your working years, market dips can be frustrating but temporary, your income and time horizon help smooth things out. In retirement, however, you’re drawing from your savings, and poor returns early on can have a big impact on your long term outcomes.

This is known as sequencing risk, and the layered strategy is designed to manage it. It acts like a financial shock absorber, protecting your income and giving your growth assets time to rebound.

In other words, your short term needs are secure, your medium term income is reliable, and your long term investments keep working for you.

Personalised and flexible

Every retirement is different and so is every investment plan. At Braeside Wealth, we tailor your investment layers to your unique goals, spending patterns, and comfort with risk.

Some clients prefer a larger cash buffer because they value security and flexibility. Others want more growth exposure to maximise long term returns. There’s no one size fits all approach, we design a strategy that suits you and evolves as your needs change.

We regularly review your plan, adjusting allocations as markets shift or your lifestyle evolves. The layers are dynamic, not static, ensuring your money is always working in the right way.

Keeping emotions in check

Investing isn’t just about returns, it’s about behaviour. The biggest challenge for many retirees is staying calm when markets get bumpy. At Braeside Wealth, we’re passionate about helping Australians make work optional, not just financially, but mentally. That means building a structure that provides both freedom and confidence.

Our layered approach helps take emotion out of investing. When you can clearly see that your next few years of income are already covered, you’re far less likely to panic during market downturns.

That confidence is priceless. It allows you to stay focused on what really matters, enjoying your retirement, spending time with loved ones, and living life on your terms.

The Braeside Wealth difference

At Braeside Wealth, we don’t just manage money, we help clients build financial freedom that lasts. Our approach is grounded in evidence, discipline, and understanding what really matters to you.

If you’re approaching retirement or already there, and want a plan that protects your income while keeping your wealth growing, we’d love to help.

Get in touch with Braeside Wealth today for a chat about how this approach could work for your situation. It’s the first step toward a calm, confident, and financially free retirement. Click here to book a 15-minute Good Fit Chat.  

The information in this article is general information and does not take into account any person’s individual situation. You should always do your own research, or seek professional advice to assist you in making an informed decision about what suits your needs.