By Dan Kihato


Contrary to popular belief, even pensions are prone to economic uncertainties, much like conventional investments. However, as these are long-term fixtures, you are expected to survive the occasional bumps on the way and end up getting full value for your corpus. Then again, it might be a bit unsettling to see the pension balance nosedive along the way, especially when the financial portfolio is linked to high-growth policies.These are not the ideal conditions any life insurance policy holder would want their retirement corpus to be in. However, what you can do is take the help of a pension expert to evaluate your portfolio and suggest a better path to take. Solving your pension problems could be achieved by a number of means, for instance, downsizing your portfolio to have it less volatile.

However, if you are looking for a more comprehensive solution, then you might want to explore the option of policy consolidation.


What affects your pension balance?

Individuals relying extensively on defined contributions as the preferred mode of pension investment might have to account for the fluctuations. Defined contributions allow the provider to invest the accumulated sum in the stock market, which is obviously open to financial fluxes. While this might sound riskier for short-term investors, the pros eventually outweigh the threats, in the case of longer hauls like pension investments.

Regardless of the market trend, you choose to ride, anomalies relevant to the pension schemes are momentary blips and hardly have it in them to manipulate your retirement corpus. However, you need to be level-headed and brave enough to sustain the bullish or even the bearish tide.

A Good Way to Make Hay

In case you are game for defined contributions, a good way to add some meat to the corpus is by investing when the chips are down. Seemingly, the post-covid19 stock market is a good breeding ground for your defined pension contributions. This approach helps you purchase pension units at a lower price, whilst increasing your chances of reaping the rewards, once the market rebounds. he recent volatility in the market has created a unique opportunity for people to build their pension corpus by investing during downturns. After all, they say: “Buy when everyone is selling and hold till everyone is buying”. While it is difficult to determine when exactly the turn of tide happens, but by investing a portion of your defined contributions, you can pace your investments in such a manner that you get a significant discount on the number of units you are buying.

Automated Risk Dependency

Several individuals opt for pension policies that take age-centric risk dependencies into account. In case you choose to invest early, a majority of your investments are targeted towards growth-centric, higher risk brackets. As you age, the pension plan starts shifting to the lower-risk avenues, with Government Bonds being a priority. 

The Benefits of having a Diversified Portfolio

A diversified, post-retirement portfolio allows you to enjoy the several pension freedoms that come along. With the annuity restriction lifted way back in 2015, you can use the diversified structure of your retirement corpus to increase financial autonomy. Besides, opting for myriad pension investment policies like properties, bonds, defined contributions, and more allows you to square-off the higher risk appetite with slow growth schemes. 

Regardless, if you choose to be more expressive with your pension investment, fluctuations are common but they hardly end up eating into your post-retirement funds.