Mr. and Mrs. Lee, both 60, plan to use their $1,500,000 investment portfolio to fund their retirement, which they expect to begin gradually over the next two years. They anticipate needing $80,000 annually from the portfolio initially, adjusted for inflation. They also want to gift $100,000 to their grandchild in 7 years. How should the advisor structure their time horizon for the IPS?

Question: Mr. and Mrs. Lee, both 60, plan to use their $1,500,000 investment portfolio to fund their retirement, which they expect to begin gradually over the next two years. They anticipate needing $80,000 annually from the portfolio initially, adjusted for inflation. They also want to gift $100,000 to their grandchild in 7 years. How should the advisor structure their time horizon for the IPS?

Answer options:

• A single long-term horizon (25+ years) due to retirement funding.
• A short-term horizon (0-2 years) for pre-retirement and a medium-term (7 years) for the gift, followed by a long-term for retirement income.
• Primarily medium-term (2-10 years) to cover the initial retirement and gifting needs. ✅ A blended approach emphasizing long-term growth for retirement, with specific tactical allocation for the initial income ramp-up and the future gift.

Correct answer: A blended approach emphasizing long-term growth for retirement, with specific tactical allocation for the initial income ramp-up and the future gift.

Explanation: The Lees have immediate (income ramp-up), medium-term (gifting in 7 years), and long-term (general retirement funding) objectives. A blended approach acknowledges these distinct yet interconnected time horizons within their overall post-retirement plan.