Taking risk with some of your money to achieve a sustainable retirement income

Its important that you are able to have a sustainable retirement income, you do however have more options than ever before to help you find the best solution for your own personal circumstances. We at Hutt Professional have financial advisers who would be able to help you find this best solution for you and help decide what risks you should and shouldn’t take in order to get better returns.

If you are someone that has been investing for a number of years, you might be familiar with the idea that ‘risk’ represents the chance of your investments to fall as well as rise in value.  In general, a higher-risk investment will have a higher potential return. whereas with a lower-risk investment you would usually get a lower return. This will still apply in retirement, however the bigger risk will be the danger of running out of money too soon.

Factors to consider
Longevity – Rising life expectancies are undoubtedly good news. However, they are putting significant strain on both the state and private pension provision. In 1925, when the State Pension age was set at 65, average life expectancy for men was only 56*. By 2012, it had risen to 79.5, but the state retirement age – for now at least – remains at 65. When you are planning your retirement income, it is essential to consider carefully the risk of outliving the money you set aside for retirement.

Inflation – As prices rise over time, the real value of your money can be eroded. When you are working, your income generally gets inflation protection through annual pay rises. When you retire, inflation becomes much more of a risk if your income is not rising. This is why you may wish to invest some of your money with the aim of growing your capital – and, therefore, your income.

Risk and reward
It is important to keep enough cash available for short-term needs and to understand the potential risks involved in investing. While there are varying levels of income available across the different asset classes, assets that pay higher levels of income also have a higher risk of capital loss. Before you choose a particular income strategy, you need to be comfortable with the level of risk involved.

If you have investments already or wish to set up an investment or a number of investments but wish to seek independent financial advice. We at Hutt Professional have financial advisers with many years of experience in offering investment advice who would be more than happy to help. If you are located in Leamington Spa or surrounding areas please do not hesitate to contact us as we would be more than happy to appoint you with the correct independent financial adviser for yourself.