It is a question that will be on many people’s minds as they approach retirement particularly with greater pension freedoms giving increased flexibility on how to use their pension savings.

With greater flexibility comes greater responsibility to make sure that their hard saved pension pot sees them out! Do they invest their monies and live off the proceeds, withdraw capital sums to supplement their state pension (and if they are lucky final salary pensions) or do they opt for total income security in retirement by opting for an index linked annuity.

There are a large number of variables that need to be factored into these decisions which are discussed in an excellent recent academic paper published by the Cass Business School called Pension pots and how to survive them.

The factors include what we know now such as the value of pensions, investments and property but there are also many variables that we don’t know such as future investment returns, house price inflation, annuity rates and life expectancy.

To help navigate these variables you need the help of a Chartered Financial Planner who can help  build a bespoke retirement plan from which you will better understand the risks involved and which will be regularly reviewed alongside investment advice and strategies to minimise tax.