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Drawing an income in retirement: a unique challenge

Retirement presents a unique set of opportunities and challenges, as the focus of your financial affairs shifts from your salary to your pension pot and other savings. The challenges are very different from those you face when saving for retirement.

Key challenges

1. Inflation: rising prices can eat into the value of your savings and income if they do not grow at the same pace as the cost of goods and services.

2. Longevity: ensuring your money lasts as long as you need it, especially if you would like to leave some or all of your remaining savings to loved ones.

3. Fluctuations in financial markets: when you are saving for retirement, you are better able to handle movements up and down in the returns on your investments. This changes once you need to rely on your savings to draw an income, because a period of weakness in markets can have a dramatic impact on the length of time your funds can last.

Overcoming the risks

Overcoming these risks is not impossible, but it helps if you have the right kind of advice and the right kind of investment strategy. The Generation Portfolios are specifically designed to meet the needs of people who seek to draw an income from pension savings while remaining invested in markets, via a range of multi-asset portfolios. The portfolios aim to beat inflation and offer the potential for capital growth. At the same time, they seek to mitigate the impact of market falls through a focus on short-term risk mangement.

For more information, please speak to your financial adviser.