With a choice between pension retirement income and investment retirement income, I've always chosen investment retirement income. After reviewing our
investment retirement income for the past 6 years, I am relooking at the options again.
Here are the pros and cons as I consider at the options.
Pension
- Pros - Guaranteed, stable, inflation adjusted.
- Cons - No control, upside capped
Investment
- Pros - Controlled by retiree, big upside possibility
- Cons - Volatility, big downside possibility, requires management effort
Overall, I don't think there is one right answer for everyone since it depends on personal risk tolerance, interest, and available time. For us, I think an blend of pension type retirement income and investment retirement income will be a good approach. Since neither my spouse nor I have a pension, we will need to consider other options to create stable retirement income streams.
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This is not financial or retirement advice. Please consult a professional advisor.
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