Weigh in the balance

Individuals reaching retirement have to strike a balance between competing factors when converting a pension into an income stream. One hot topic, due to all the recent headlines about spiraling fuel and food prices, is inflation. Those on fixed incomes need to understand the likely erosion of their purchasing power - inflation of just 4% will halve the value of their income in less than 17 years, a shorter period than the average retirement. The problem is that no-one has a crystal ball and inflation is only one number in a complex equation that includes annuity rates or investment ret...