Weighing up risk

Running out is the risk of outliving your savings in retirement - known as your longevity risk. Some people are so afraid of running out of money that they restrict their lifestyle and forego expensive opportunities such as overseas travel. How can you balance your need for your money to last,and enjoying yourself?

Check out why you need financial advice.

Heard the acronym SKINs - 'Spend the Kid's Inheritance Now'? As usual, there's some truth behind the joke. The risk many people are afraid of is that they will die before they've used up all their money. On the other hand, most of us would like to be lucky enough to live longer.

How long can we expect to live? Check out life expectancies.

You may hear the golf course calling you when you are 55. If you want to retire early, you'll need more savings to fund your lifestyle and you'll have less time to accumulate it. Maybe you should consider working part-time

Can you keep working?

Generally the higher the return you want to earn from your investments, the higher the risk. Shares and properties have historically earned higher long-term returns than cash or bonds.

Learn more about asset classes in our 'Investment Basics' section

When you retire, your hard-earned savings represent the full sum of your working life. However, there's a risk your gains may be eroded by inflation and taxation if you show excessive caution. To extend the life of your portfolio, you may need to invest in growth assets like shares and property. Speak to a professional adviser to find a strategy that's right for you.

Read more about working with risk in our 'Investment Basics' section.

If you are worried about taking risk in investment, you may consider a strategy that aims to reduce your chance of loss. For example, a three part retirement investment strategy may include:

• cash for the short term
• moderate growth portfolio for the medium term
• high growth portfolio for the long term.

Find a financial adviser using BT's financial adviser referral.