5 Tips for Managing Money in Retirement

Have questions about money management in retirement? Here are five tips to help you towards your long-term retirement goals.


Retirement is an important stage of life and one that takes plenty of foresight and planning to make sure you have the necessary amount of retirement income. If you’ve got a healthy pension or other savings you’ve accumulated for retirement, that’s an important step! But your journey to a comfortable retirement may have just begun. To make sure you have sufficient retirement savings, retirement income and other income, you may need to invest and manage money in retirement to meet your goals.

Here are five important tips that may help you in your investing process.

Tip 1: Define Your Investing Goals

Have you saved up a large pension pot with some pension freedom and investing choices? If yes, good for you! If not, you may still be able to achieve your retirement income goals. Investing for and during retirement can be a great way to help ensure you have the retirement income and savings you need for the future. The first step to investing in any situation should be to define what you hope to achieve with your investment.

Many retirees hope to have income or savings to fund their retirement and even pass on to a spouse or other dependents. Others may simply wish to spend their entire pension pot throughout their lifetimes or they may be concerned about tax relief or other tax considerations. Whatever your goals are, you will be better suited to choose the right investment and income strategy if you can identify what you hope to accomplish with your money.

Tip 2: Choose an Appropriate Asset Allocation

Asset allocation refers to your investment portfolio’s mix of equities, income-based products (like annuities), fixed interest, cash and other assets. Choosing how to invest your savings is a big decision and one that can have lasting effects on your ability to achieve your long-term investment goals.

If you reached state pension age last year and decided to invest your savings or pension in low-returning annuities or cash, that could mean sacrificing potential investment growth in retirement. While some investors may have a sufficient portfolio to invest in cash or an annuity, many do not. If you need portfolio growth to meet your retirement income needs, investing too conservatively too early could increase your risk of running out of money in retirement.

The right asset allocation for you depends on many things, including your goals, pensions, personal situation, marital status, potential lifespan, tax situation and much more. As these inputs change in retirement, you may need to revisit your asset allocation to see if you need to make any changes to provide necessary future income.

Tip 3: Define Your Investment Strategy

Once you know your goals, asset allocation and income needs, you can explore ways to invest to achieve those goals. There are a plethora of potential investment strategies and none are perfect for everyone. To choose one that works for you, consider how you might prefer to invest your savings or pension pot. What do you think drives long-term returns for future income? Do you place more emphasis on stock-picking or investing in certain areas of the market?

Stock picking means finding companies you think will do well and investing in them accordingly, but one alternative is a top-down investing approach. This strategy emphasizes higher-level decisions—such as asset allocation, market sector choices and country allocation—over individual stock picking.

Tip 4: Know Your Investing Biases

Where many pension investors go wrong is by making behavioral mistakes and emotional investing decisions. One bias to beware of is confirmation bias—the tendency to interpret new information in a way that confirms your existing beliefs. Investors may do this with political views, past decisions they have made in their pensions or other income sources and much more.

While there are many more mistakes investors make, an important one to note is regret shunning—humans’ tendency to embrace good decisions and forget bad ones. This tendency can cause you to neglect any bad decisions you’ve made in the past, potentially preventing you from making the same mistakes repetitively with your pension or investment accounts.

Tip 5: Delegate If Necessary

If you enjoy investing and the responsibility associated with investing your pension pot, personal pension funds or other money, then these tips can help you get started. However, if you prefer to spend time with family, travel, relax or focus on your hobbies in retirement, then taking on the daunting task of investing your own assets may not be for you. In the latter case, an adviser or money manager may be able to help you answer some of these questions and provide the income strategy, financial advice and tax analysis you need to achieve your long term goals.

How We Can Help

Fisher Investments UK can help retirement savers and retirees estimate and plan for their sufficient annual allowances and retirement incomes. We may be able to analyze your current plan and tax situation and provide feedback and suggestions.

If you need help answering questions regarding income, tax, pensions or investments, please call to speak with one of our qualified representatives or download one of our educational guides today.

Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance neither guarantees nor reliably indicates future performance. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates.