For people approaching retirement and already in retirement, investment can be a big issue.
A simple but crucial factor in this is that we’re living longer – and your pension fund may have to support you for up to 30 years. Actuarial studies suggest that one in four 65-year old males alive today will still be alive in 2040.
Where finances are concerned, there is a real danger of taking too short-term a view. If you are very risk averse and hold a lot of capital in cash or fixed interest investments, you will be exposing yourself to the risks of inflation and may feel the effects of what academics have started to call ‘reckless conservatism’.
If you want an income that rises in line with prices, we advise investing a large proportion of your assets in investments such as shares and commercial property. However, along with greater earning potential comes greater risk – their values are almost certain to fall in any financial crisis, as they did in 2007-08. This is why we always address ways to protect your income and capital from the risk of crises and crashes.
Although there is no perfect solution – any form of insurance against disaster costs money, which will reduce your investment returns – there are a variety of techniques we can use to limit potential losses.
“It was refreshing to witness your clear, detailed and honest advice concerning my pension fund.I’m pleased to say I saw your ideas and comments as trustworthy and constructive and made me look at new ways of securing my pension whilst giving it the opportunity to grow until I’m ready to retire fully in about 5 years.”
B S, Somerset
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