I comment on the case of retired Guilherme, who wants to supplement his income and is studying changing investments – 02/21/2024 – Market

When we evaluate investment alternatives, we must consider not only the investor’s ability and capacity to take risk, but also the correct understanding of the risk factors. Failure to consider all these variables results in wrong decisions or missed opportunities.

When talking about understanding risk factors in investments, we cannot fail to mention the role of social media. On the one hand, they brought greater dissemination of financial education.

However, it also came with misinformation or wrong information, which is even more quickly spread on digital channels than correct information.

I discuss one of these pieces of misinformation, but also the issue of understanding the risk that could affect retired engineer Guilherme, aged 69.

He currently benefits from an INSS pension of R$5,200, but wishes to supplement it with monthly withdrawals of R$5,000 from his financial assets.

Throughout his career, he accumulated assets of R$4 million which is invested as he describes: “85% in CDB, LCI and LCA through brokers, and 15% in fixed income at banks.”

Your question is very peculiar, as it portrays misinformation spread over the internet and also a failure to understand the risk in retirement: “As I am afraid about the failure of an institution/broker and being left without money in old age, as the FGC may not be able to return everyone, in a generalized crisis, I’m thinking about putting 100% in Treasury Selic, because that way I’ll be immune to any bank failure. What do you think? Can I live with Treasury Selic alone?”

Your question reflects a confusion that is often reported about the FGC (Credit Guarantee Fund).

Many financial “educators” report on digital media that the FGC would not be able to cover the entire volume of bank bonds issued. This is a myth. They say this to instill fear and, thus, lead investors to some attitude that suits them.

Here it is necessary to consider two elements: what the FGC guarantee is and the probability of fear of widespread bank failure.

The FGC only guarantees up to R$250,000 per issuer and per CPF or CNPJ, limited to R$1 million every 4 years. Considering this restriction, it suits practically all investors, even if all institutions fail.

However, let’s face it, I am unaware of any financial crisis that has ever occurred in the world, in which all financial institutions have failed. This is as difficult or more difficult than counting on your luck to win the Mega-Sena.

Fears about this fact can be mitigated with more knowledge from reliable sources.

However, Guilherme’s situation is comfortable enough that he does not need to rely on the premium from private bonds. Therefore, yes, he can only invest in public bonds.

From his current applications, it can be seen that he is a conservative investor and should not have the ability to take risks. All investments are concentrated in fixed income and the majority in CDI-referenced securities. However, when talking about retirement, being conservative does not mean investing in the CDI or Selic.

Due to your age and stage of life, your ability to take risks is low. In other words, because he is already living as a retiree, he can no longer afford to make mistakes, as one mistake could cost him his retirement. And making a mistake when choosing the index for your fixed income can compromise your security in retirement.

In this sense, Guilherme must carefully consider the desire to invest only in Tesouro Selic as a form of retirement investment. This would be a risky application in your case and is not intended for the purpose of earning a living.

The Treasury Selic is an appropriate application for short-term investments and for liquidity in redemptions. Therefore, only the amount you intend to use within one year should be kept in this application.

Beyond this period, the recommended application is one that guarantees the investor the replacement of inflation and real interest. This way, it is possible to create a plan for the real income to be received.

Therefore, the recommendation for resources lasting more than 1 year is the IPCA Treasury.

Bonds from the Tesouro Renda+ programs in conjunction with Educa+ can be used to receive monthly payments as retirement income.

At this moment, real interest rates on federal public bonds are at 5.5% per year, above inflation. When subtracted from IR, this profitability is equivalent to 0.33% per month.

If the amount of R$4 million is distributed in these public bonds and at this rate of return, Guilherme will be guaranteed an income of more than R$18 thousand per month until he is 100 years old.

Therefore, he can ensure receiving more than three times the desired income if he invests now in long-term federal public bonds referenced to the IPCA. However, the same guarantee does not exist if the assets are invested only in Treasury Selic.