Optimal Gearing

Objective:

• Determine the optimal gearing level to meet the expected capital shortfall at retirement

Suitable for:

• Pre-retirees with a pre-determined expected capital shortfall at retirement. 

Key features:

• The shortfall gap can be identified by running the adequacy strategy first. Results from Adequacy will be exported to Optimal Gearing;

• Simulation analysis is performed to determine probability of outcome;

• User can nominate a preferred gearing strategy to reflect whether they wish to adopt a passive gearing strategy, a re-gearing strategy or a de-gearing strategy from the starting loan position. 

Results:

• The starting Loan to Valuation ratio that has the highest probability of eliminating the expected shortfall at retirement is recommended.