How Your Investment Strategy Should Change as You Near Retirement

Most people know their investment strategy should change as retirement approaches. Fewer know when to start making those changes, or what they actually look like in practice. The answer depends on more than your age. It depends on the kind of retirement income you're planning to draw, and how much flexibility you have if markets move against you.

Why timing matters more than you think

There's no single moment when a growth-focused portfolio should pivot towards something more conservative. For some people, that shift starts ten years out. For others, it happens gradually over two decades. What tends to drive it is not age alone, but the shrinking window for recovery. If markets fall sharply in the years just before you stop working, you have less time to make up the difference than you did at forty.

From growing your pot to drawing from it

For most of your working life, the goal is simple: grow your savings. As retirement gets closer, a second question enters the picture. It's not just about how much you've built, but how you'll turn it into a regular income.

If you plan to use income drawdown, your money stays invested after you retire and you take withdrawals from it over time. The risk is that if markets fall in the early years and you're still drawing from the pot, your savings can reduce faster than expected. It's a bit like spending from a reservoir during a drought. Many people protect against this by keeping one to three years of living costs in cash, so they're not forced to sell investments at a low point.

What the research shows

According to DWP research, more than half of adults aged 40 to 75 who had not yet retired planned to use savings or investments to top up their retirement income. For most people, the pension pot is not a passive safety net. It's something that needs to be actively managed, especially in the years leading up to retirement.

Everyone's situation is different

How you structure your investments depends on what other income you'll have in retirement. If you have a final salary pension paying a guaranteed amount each month, you may be comfortable taking more investment risk elsewhere. If your retirement income relies mainly on a workplace or personal pension pot, a more gradual shift towards lower-risk investments tends to make sense as your retirement date approaches.

Tax is worth thinking about too. Drawing from a pension, an ISA, or other savings in the wrong order can mean paying more tax than necessary. Looking at your finances as a whole helps make sure your income works as efficiently as possible.

The advisers at LDB Wealth have been helping clients across Weybridge, Surrey, and beyond think through these decisions since 2014. If you're within ten years of retirement, now is a good time to review whether your current strategy still fits where you're heading.

Tax planning is not regulated by the Financial Conduct Authority.

Approver Quilter Financial Services Limited. May 2026.