Does my investment strategy change after I retire?

 

Investing IN Retirement is different to Investing FOR Retirement.

With annuities currently expensive, Approved Retirement Funds (ARFs) are extremely popular for people retiring nowadays. Not only do they give you increased control and flexibility, any remaining funds on death are included in your estate.

However, there are challenges involved with an ARF;  

1.      You assume the risk for your ARF,

2.      Make sure it generates income long enough to last for the rest of your life,

3.      Early losses have a big impact.

Your investor profile will have changed considerably from when you were working. You will typically be looking for calmer water.

1.      You are older,

2.      You are not saving from earned income,

3.      You are withdrawing from your saved income,

4.      Your ARF will be a primary source of income to maintain your standard of living.

PRE-RETIREMENT - THE FOCUS IS ON GROWTH

POST-RETIREMENT - THE FOCUS IS ON RISK/RETURN/FLEXIBILITY/INCOME/LONGEVITY

ARF’s that incur early losses will bomb out quicker. Good diversification and risk management key as withdrawals will magnify volatility.

Irish Life have recognised this challenge and launched a range of funds designed specifically for people in retirement:-

1.   Defensive equity strategy,

2.      Income generating focus,

3.      Risk management strategies like their popular Multi Asset, MAPS funds,

4.      Different funds available to meet investors different risk profile,

5.      Management charge only 0.15% above base.

When preparing for retirement, speak to a trusted adviser on the specialised post retirement funds now available.

Arrange a meeting with Mind My Money

 

Warning: The value of your investment may go down as well as up