Investors who are near or already in retirement face the most challenging of investor needs: simultaneously investing for both immediate income and long-term growth. The key challenge is to ensure a sustainable standard of living by balancing the needs of today with those of the future. In this issue, we propose strategies to manage the trade-offs that need to be considered in ensuring appropriately prudent retirement income planning.

In recent years, we have warned investors to moderate their expectations for long-term returns, and make sure that they are not withdrawing more from their living annuities than can be sustained. We continue to hold this view, recommending an initial drawdown rate of below 5% as a starting point in the planning process.

Still, we believe the disappointing equity returns of the last three years are not the new normal. In fact, we would urge investors to keep a healthy exposure to equities, which should remain the largest driver of investment growth over time.