How To Reduce Your RISK in Retirement

Should you reduce the risk of your investments as you approach retirement? For years - decades, even - the answer was yes, but now that answer is very much more nuanced.

In this video I want to clear up the confusion about this subject and give you some guidance as to how you should think about risk as you make the big leap into retirement...

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Chapters
00:00 Welcome
01:39 Risks in retirement
03:15 Priorities for our money in retirement
05:22 Cash events
06:37 Basic risk profile
07:47 Risk-flex
09:21 The Cashflow Ladder
10:37 Conclusion

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📫 Leave me a comment below - I read all of them and love hearing from you!

[MeaningfulMoney]

Let me know how you find these videos - I love hearing from you and try to respond as much as I can!

[maltesetony]

Another excellent video. I'm pleased to say that, having just retired at 62, what I have invested / kept in cash, etc, is pretty much in line with what Pete recommends. Maybe that's just luck, or common sense - but it did take some working out by me, and un-aided too. In fact, I'm so pleased about that, I think I'll treat myself & turn the central heating on. Whoo-hoo!

[pauljones]

Interesting and straight talking video, not over complicated jargon easy to follow and understand - thanks

[HiruS]

That was really helpful, particularly the concept of breaking down your needs over specific time periods and allocating risk levels to each one. As I get within a year of taking early retirement I'm finding your channel more and more useful, thank you.

[LiamMcCauley]

Thanks Pete, I really enjoyed this video. I was someone who was just passively putting money into a pension each month, without really thinking about what I would do as I approached retirement. Then I stumbled across your channel, and I have now become much more deliberate with my money. I feel like I am getting the hang of the concepts, terminology, and how to apply it. I'm hoping to retire in about 5 year's time, so I've started watching Season 16 of your podcast. Once I have digested that, I will consider whether to invest in the Retirement Planning course (while continuing to enjoy watching your YouTube videos).

[ihemz]

Hi Pete, just wanted to say you have really excellent and uselful content. My dad's coming to retirement soon and we're finding your vidoes a great learning source in guiding him on how to manage his money in retirement. Keep up the great work and Thank you!

[Duncan]

I really enjoy your vids as you provide such great information on so many financial topics but it is sometimes quite hard to listen due to sibalance in your audio. Just a suggestion, it may be worth looking into getting a de-esser plug-in for whatever video production software you use so it makes for easier listening (1:14 being a prime example). Keep up the great vids!

[petermorris]

Definitely planning, allocating and discipline are key. As one ages, you are hit with a double whammy - Your propensity to cope with losses reduces and yet the size of losses, in absolute terms, will increase due to greater pot size.

[bighare]

This is really thoughtful encouragement to think about what one really wants from savings and investments and how to plan to make best use of money over the longer lifespans we now enjoy. You speak with such passion and care and knowledge Pete in ways that make me feel included and curious to know more and do more for myself. Thanks. Keep up the great work.

[dduplis]

Fantastic video yet again. This time even more succinct and well explained.

[bazwan]

Great video which has certainly got me thinking about my own circumstances / investments. Thanks.

[mfuxalamaluua]

Hi Pete, firstly, thanks for your videos. I've always hated finances and did my utmost to avoid dealing with them. When younger, that never used to be a problem because I never had any money.

Now I'm 'grown up' (is 55 grown up?), and have a mortgage, car loan, credit cards, two kids, pension, insurance, etc., I need to get a grip on things.

I'm following your advice on '10 Steps To Organise Your Financial Life' as a starter, but that has uncovered some worries I'd appreciate your advice on.

I've done a lot of research recently (I am a researcher by trade) looking at the financial state of play in world wide economies. My very brief summation is that a) China is completely knackered, b) The USA is not far off and c) the UK is fairly knackered and will probably also suffer a kicking from the other two economies nose-diving.

My options are limited as I have no investments, other than my pension (Aegon index tracker). I am also tasked with doing my best to safeguard my Mum's recently acquired investments from when my Dad died last year. These include some bonds and index-tracking investments run via St.James Place.

My two main concerns are:
a) I feel I should shift at least some of the share-related investment to gold
b) I've read SJP (and Aegon, for that matter) aren't doing particularly well at managing people's money. Should I seek an alternative?

Appreciate you're likely super busy, but if you get 5 minutes I'd really appreciate your thoughts.

Cheers

Jeremy

[philrussell]

Thank you Pete for the great information. Really enjoy everything you put on YouTube. Much appreciated.

[todddavidsonppcoaching]

Hi Pete, rather than try to guess what you see as the difference between risk and volatility I thought I'd just ask you

Unbelievable content as always, thank you

[simonspencer]

The cash flow ladder is a great concept - thanks!

[jackpilkington]

Good video, thanks! Was very interesting to hear about the four blocks and how you block client’s money.

Would love to know your thoughts more on property as an investment and how that can fit into someone’s retirement plan.

[davidwebb]

This is far more sensible than just moving more capital into bonds which is what most people traditionally advise. However, if interest rates rise and bond yields become more sensible then people could switch back to this more traditional approach as it is very simple.

[johnwilliams]

Great video. Succinct, and so easy to understand.

[Bosshog-WealthHealthBetterment]

Still a way off for me but I quite like the approach.

It's a bit more complicated also because some investments you can't get at if you are retiring early (like pensions in the UK), and likewise different income has different tax implications, lifetime allowances, etc. But I think dividing your investment pots in the way you suggested makes a lot of sense.

[vinay]

Wonderful topic! But worthwhile remembering that the ‘layering of risk’ (like the risk ladder you described) is itself very uncertain. There are people like Ray Dallio and Charlie Munger saying the next 10 years may not really provide the same returns on equity investment as the last 10 years have done. How do you hedge for that?
I think those of us in our 40s aren’t really going to have the rosy retirement years that the baby boomers are enjoying now. I see many of us working in the gig economy post retirement to keep things afloat.