Pension
Income
Investor

Step 3: What to invest your pension in

Building a retirement income portfolio from scratch is easier than you might think.

The first step towards your income-producing pension pot is already in place: you have transferred all your available pots of money to a platform that is able to provide the service you need.

The next step is a crucial one: to deploy the money in your amalgamated pot into income-producing investments. In this part, we guide you through the steps you need to take to build the right income portfolio for your circumstances and present our three model portfolios, one of which should be suitable for you.

The need for an income portfolio

This part is arguably the heart of the website: the actual investment portfolios into which you will deploy your pension savings in order to generate a secure income that is sufficient to meet your needs in retirement.

We will now detail three portfolios, each of which contains assets such as shares and bonds, into which your pension money can be invested to produce this income.

But first we briefly explain why it’s necessary to take the trouble – and to some extent the risk – of investing in shares and bonds when two seemingly safe options, namely cash accounts and annuities, exist. If you have already decided not to consider either cash or annuities, you can skip these parts.

We also introduce the ‘cash buffer’ and why so it’s vital to have one.

◆ Why shouldn’t I just invest my pension money in cash?

◆ Or in an annuity?

◆ Introduction to our three income portfolios and how we constructed them

◆ The all-important cash buffer

◆ Portfolio 1: The high-income portfolio

◆ Portfolio 2: The inheritance portfolio

◆ Portfolio 3: The compromise portfolio

◆ When do I need to consider changing the investments in my pension income portfolio?