SCHRODERS
THE LONGER YOU INVEST
FOR, THE GREATER THE
POTENTIAL FOR YOUR
MONEY TO GROW AND
THE MORE YOU COULD
BENEFIT FROM THE
POWERFUL EFFECT OF
“GROWTH ON GROWTH”
While some of your expenses may
fall when you stop working, the
retirement years could bring greater
spending on utilities and healthcare,
among other things.
Begin by making a plan
“Is the same income plan fit for
all purposes?”
It may be appropriate to have
different income plans for different
purposes. You may, for example, be
happy to accept a greater degree
of risk in an income plan designed
to help you with “nice-to-haves”
such as foreign holidays or home
improvements than for “musthaves” such as day-to-day living
expenses in retirement or college
fees for your children.
GETTING STARTED
Here are some tips to help you
achieve your income investing
objectives throughout your life.
Work out what you need to
achieve and set clear objectives
“I don’t know how much I need
to save.”
Your savings objectives should
reflect the aims of your income plan.
If you want a reasonable standard
of living in retirement, for example,
a useful rule is to save enough to
provide an income of between half
and two-thirds of your final salary.
Start saving as soon as you can
“What’s the benefit of starting
to save early?”
The longer you invest for, the greater
the potential for your money to
grow and the more you could
benefit from the powerful effect
of “growth on growth”, known
as compounding. Assuming
investment growth of 4 per cent per
annum, an investment of £1,000 at
the age of 30 would be worth £3,950
by the time you reach 65.
Don’t ignore the need for
retirement income
“I’m not worried about
providing for my retirement –
the state will look after me.”
Responsibility for financial security
in retirement is falling more heavily
on individuals and this trend is
likely to continue.
Be open-minded when
considering income solutions
“I am only comfortable
investing in companies or
industries I am familiar with.”
Aim for an income solution
that’s truly appropriate for your
circumstances, objectives, risk
attitudes and capacity for loss, rather
than simply sticking to what you’re
familiar with. Considering a broad
range of investments can help you
to reduce risk and increase your
chances of achieving your objectives.
Get advice if you need it
“I don’t understand the options.”
An independent financial adviser
can explain all your options
and help you make the best
decision based on your individual
circumstances. If you do not
currently have a financial adviser,
one option is to search for a local
adviser at www.unbiased.com. You
may also find it useful to visit www.
vouchedfor.co.uk, where members
of the public rate and review
advisers they have used.
Please remember, the value of
investments and the income
from them may go down as well
as up and investors may not get
back the amounts originally
invested.
For more information on income investments for retirement
from Schroders, visit Schroders.co.uk/retirement
Important information: This article is intended to be for information purposes only and it is not intended as promotional material in any respect. This article is not intended as an offer or solicitation for the
purchase or sale of any financial instrument. Schroders has expressed its own views and opinions in this article and these may change. This article is not intended to provide, and should not be relied on for,
accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this article when taking individual investment and/or strategic decisions.
Issued in April 2015 by Schroder Unit Trusts Limited, 31 Gresham Street, London, EC2V 7QA. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority. UK09123
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