There are risks associated with drawing down your pension – as with any investment or change to your pension. It’s essential to get tailored advice on your situation before you make any decisions about your pension fund.
Any major financial decisions regarding your pension should be considered seriously. It’s essential to work with a trusted advisor if you’re considering any changes to your pension, otherwise you run the risk of decreasing its value.
One of the main things to consider is how you’ll fare if your investments depreciate in value. It’s essential to think about how you’d survive in this case and set income aside to use should this happen. You’ve worked hard during your life to save for retirement, so using this money smartly should be on your radar.
You can keep your entire drawdown as cash, rather than investing, but this may depreciate over time with inflation. For this reason, many people decide to keep just enough to act as an emergency fund, while cleverly investing the rest. You don’t want your pension to depreciate over time, as this will affect the quality of those golden years.
Obtaining pension drawdown advice can help you to fully understand all risks and overheads involved within the process.