The underperforming markets over the last few years could leave you stressing over finances, especially if retirement is in the cards soon. These markets can be problematic for retirement, especially in the long term, if you plan to use your assets to draw an income. 

Poorly performing markets means that your total portfolio value is worth less, and when you start drawing an income, its value decreases even more. This could leave you with a shortage of funds later in retirement.

If you still have a few years left till retirement or plan to work more years instead of retiring, then time is on your side, as markets tend to recover. For every downturn, there is usually an upturn.

It is vital that you manage this risk and allocate your income drawdown in such a way that reduces risk to your portfolio. 

Now is the time to chat with your deVere advisor to manage the risk of your portfolio and avoid income shortages down the line.

• Diversification is vital – Ensure that your portfolio is invested in diversified funds to mitigate risk. These are funds that consist of different economic regions (e.g. America, Europe, and Asia), different asset classes (equities, bonds, and cash), and different sectors (financial, energy, technology, infrastructure) etc.
• It is a frequent practice to lower one’s risk profile the closer you reach retirement age. This is to protect your accumulated wealth and prevent it from losing value.
• A significant risk is rising inflation and cost of living – This can eat away at your retirement savings. Ensure your money is earning inflation-beating returns to help cover this loss.
• A rainy-day fund is essential to cover unforeseen costs. Otherwise, any extra medical expenses, major repairs, or income supplements needed will eat away at your retirement capital. It is always good to have separate savings to cover such things or to use if you run short of money instead of your retirement capital.

Your advisor will help lower your retirement risk according to your individual financial circumstances and needs. [email protected]

Please note the above is for educational purposes only and does not constitute advice. You should always contact your deVere advisor for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken as a result of reading the above.