At what age should I change my largest pension pot from a balanced portfolio?

04 February 2022

Question by Lina

I am 65+ this year. My overall portfolio is approximately £750,000.


My largest pension pot is around £500,000. I am currently self employed, working part time and intend to continue until about 70.


At what age should I change my largest pension pot from a balanced portfolio?


Answered by Matt Angell

Hi Lina,

A lot depends on what your plans are when you fully retire and this will determine the investment approach you take.

If you plan to take an annuity then that would be the usual approach to reduce the risk leading up to Retirement age. This will provide you with a guaranteed source of income throughout.

However if you intend to use Flexi-Access Drawdown then you will continue to be invested throughout your retirement. This will allow you the flexibility to draw a variable income each year to suit your needs

Both have advantages and disadvantages and if you would like to discuss these feel free to drop me a message.

However the more important thing to consider is how much you will need in retirement, how you will draw the income in a tax efficient manner and what level of return is needed to sustain your income level, that will then determine the level of risk you take.

Hope the above helps with you decision making.

Thanks

Matt

Answered by

Matt Angell

Founder & Financial Planner

I am the founder of Creative Lifestyle Planning, an independent financial planning firm that works with many families across the UK. Matt specialises in helping families to answer those all important questions they have on their mind and helping many clients gain a clearer, simply understanding of when and how to they can retire.