Where will your income come from in retirement?

When you retire, and stop earning a salary from a job or self-employment, you need an alternative source of income to maintain your lifestyle.

For the vast majority, that income tends to come from a pension; a tax advantageous investment portfolio they have built over a lifetime of hard work, to convert into an income for life when they retire.

We often find that those with the most comfortable levels of retirement income tend to have incomes from multiple sources.

This might see a pension income combined with investment income, rental property, cash savings and perhaps some part-time employment.

Some new research from Barings Asset Management shows that British adults only expect to generate just over half (52%) of their retirement income from pension schemes, with the next biggest contribution coming from cash (12.78%).

Just over 11% will be generated by people’s investment in property.

These findings are broadly in line with our own experience. It is very rare to find someone who is entirely reliant on pension income in retirement, without a contribution from other income producing assets.

Pensions are simply a part of the retirement income jigsaw, rather than the solution to the entire puzzle.

With a mix of income sources, retirement can be a financially comfortable period of your life.

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