Maybe the most difficult aspect of planning for retirement is deciding what it is you want to do. Implementing an investment strategy can often be simpler than deciding what you want the strategy to achieve. But both the strategy and target are vital in ensuring a successful, prosperous and happy retirement.
Investors also often overlook the bit in between – the period just before retirement where their asset allocation needs to be adjusted to meet the changes in their lives. At this point, rather than just watching your assets grow, you need to consolidate your gains and shape your investment strategy for the future.
Tailoring your asset allocation to meet your financial needs in retirement is essential because if you don't do this correctly there’s a high chance you will take too much or too little risk. This increases the probability of losing capital when you need it or your portfolio not growing enough to provide income to last for the rest of your life. You need to balance growing your self-invested personal pension (Sipp) with banking the gains to provide what you need.