Additional income in Retirement

If you are considering investing some of your retirement funds, then you need to be aware of the effects of inflation, taxation, charges, the level of service, performance, flexibility, switching options of the investment and risk.

The levels of risk can be described as follows; Cautious, Fairly Cautious, Medium, Fairly Adventurous and Adventurous

Cautious
Capital invested is guaranteed not to decrease in value but may not be readily accessible. The rate of return may or may not be guaranteed.

Types
Cash, bank & building society accounts, guaranteed income/growth bond, national savings certificates/income bonds, cash ISA, Annuities.

Fairly Cautious
For the investor where there may be some fluctuation in value and growth. However these would be limited by guarantees built into the investment.

Types
With profit bonds, stock market linked bonds, friendly society bonds (with profits), Individual Savings Accounts (ISA)

Medium
Suitable for the investor requiring long-term growth or income but without offering guarantees. The value may rise and fall and the investor may not get back the amount invested.

Types
Capital investment bonds (managed), general unit trusts, general fund ISA, distribution bonds.

Fairly Adventurous
Suitable for the investor requiring specialist equity funds where the probability of long-term growth is inevitable balanced by the possibility of short/ medium term losses. Values may fall as well as rise and the investor may not receive back the amount invested.

Types
Capital investment bonds (specialist funds), unit trusts, ISA specialist funds.

Adventurous
Suitable for the investor who already has a diversified portfolio and wishes to expose a small portion to adventurous investment.

Types
Investments in foreign currencies, options and derivatives, certain shares and emerging markets.