Hitchin Nub News is delighted to provide a platform for expert financial commentary through our innovative partnership with Lyndhurst Financial Management, who support our coverage of the local community by being our headline sponsor - click on the banner above for more.

Founded in 1992 operating from Harpenden and having acquired an office in Hitchin in 2015, the firm has supported the local community for many years.

They value the contribution their staff make to helping Hitchin, Harpenden and the surrounding areas such a thriving place to live and work.

So, read on for expert financial commentary from Lyndhurst financial advisor James Wyman.

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Investments during retirement

The time has finally come, you're ready to retire.

You've worked hard all your working life to save and prepare for your retirement, but how should you approach investing now that you're no longer earning a salary?

When it comes to investing in retirement, even during volatile markets, the right strategy can help make sure your retirement savings last.

For many, the idea of retirement means getting away from the stresses of everyday life.

But with living costs rising and interest rates low, retirees still need to think about how they can continue to generate income from their investments throughout their retirement years.

It is not unusual for people to live more than 30 years once retired, due to increased incentives to quit work early and rising life expectancy, which in itself can present a major risk that retirees may outlive their savings.

The longer the time spent in retirement, the harder it becomes to be certain about the adequacy of your assets.

Retirement income boost

Anyway, you've been investing for decades to earn enough money to retire and the day has finally come that you can stop working.

At this point your risk-profile and strategy will almost certainly need to adjust in order to look at ways of making your money work as hard as possible, but with a view to generating income to boost your retirement income.

This is a time to look at how balanced your investments are and whether you are exposed to more risk than you are comfortable within certain areas.

It's time to conduct a review of all of your investments and decide how much you can afford to withdraw each year and whether this balances with your needs.

Too risk-averse

An elementary mistake that some retirees make is to view their portfolio with an element of finality and this makes them too risk-averse and unwilling to look beyond their current financial position.

Of course, retirement means different things to different people.

For some, it's about never working again, and instead of spending their days doing the things they enjoy most, such as traveling, pursuing hobbies, and spending more time with family and friends.

For others, retirement means working part-time or occasionally to stay busy and engaged in a profession, but without the need to earn a regular income.

Time of your life

Regardless of what retirement looks like to you, the key is to enjoy this time of your life, while making sure you don't outlive your retirement savings.

For many retirees, that means developing an investment strategy that will allow them to withdraw money from their portfolio while still enabling it to grow over the longer term.

There are a lot of ways to invest even after you have retired and your working days are done.

It goes without saying that once you have retired you'll want your retirement nest egg to last as long as possible.

And with people living longer than ever, your nest egg may need to stretch further than you'd thought when you first started saving for retirement.

Potential investment options

Given the potential investment options available to post retirement retirees, at the point of investing it's also really important to consider the effects of future financial market volatility and inflation.

While the risk of portfolio declines can't be overlooked, retirees also face another type of risk, inflation.

Even though we have recently seen historically low inflation, it's critical for retirees' investments to keep up with inflation throughout their retirement years.

Cutting exposure to equities too aggressively could hinder the growth of a nest egg, potentially leaving retirees with less than they need.

Keeping up with inflation

While many should stay invested, retirees must make sure a good portion of their investments are in safer assets.

Today's low-interest-rate environment means your money may not grow quickly or even keep up with inflation, but those assets will likely be better protected than equities in a market downturn.

If appropriate, retirees should typically have a healthy mix of equities, bonds, and other investments, such as property.

The right mix will depend on an individual's personal risk tolerance.

Retirees should also set up their portfolios in a way that better protects the funds they may need in the next five years, in the event of future stock market corrections.

Toning down risk appetite

It can be hard for some retirees to tone down their risk appetite when investing during their retirement years, following decades of investing for growth.

But diversification is just as important for investors at any age and maybe most critical when investing in retirement.

This is a time of your life to ensure that you spread your investments across and within asset classes to make sure you are well diversified.

You can spread your money across the three major asset classes (equities, bonds, and cash equivalents). This is known as asset allocation.

To balance the risks and returns of the asset classes and the investment within the asset class itself you can also

spread your money across various investment options within a particular asset class.

Increasing financial security

The most careful plans and preparation for retirement can fall apart due to any number of post-retirement risks.

But making the right investment decisions can help you increase your financial security and provide income that you can use to live comfortably after you stop working.

It is a good idea to try and set aside up to two years of living expenses in cash. Having some money that you can access quickly in an emergency situation will protect you from the need to sell some of your riskier investments at a loss and cover you for a period of time if you are falling slightly short of your income generation target.

A pension is a long-term investment, the fund value may fluctuate and can go down. your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.

Information is based on our current understanding of taxation legislation and regulations. any levels and bases of, and reliefs from, taxation are subject to change. the value of investments and income from them

may go down. you may not get back the original amount invested.

Lyndhurst Financial Management Ltd is Authorised and Regulated by the Financial Conduct Authority

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