In the few years before retirement, individuals are often anxious and filled with doubts that they have saved enough to make it through their, hopefully, golden years. One such reader, Mr K from south Dublin, is within 10 years of retirement, in a company pension scheme and pays additional voluntary contributions (AVCs).

He writes: "It has been suggested to me that I should consider asking the fund managers to place part of my AVC fund into ultra-safe investments to guard against the possibility of fluctuations in the run-up to retirement. The suggestion actually was to `hive off' a percentage of the fund each year so that exposure to risk is limited."

Mercer/Irish Pensions Trust director Mr Alan Broxson says this is a fairly standard practice. "Anybody with more than 10 years to go can invest fairly aggressively in the market, which is quite volatile. If the time left is shorter than 10 years, you can't afford to take as much risk as you used to." If there were a stock market crash for example, the fund might not recover to the initial level before retirement. Individuals in this situation should "start converting their investments to a conservative approach over the 10 years but many pension funds will do this automatically", he said. The transfer to different asset classes should be gradual, so by the time you're looking at retirement you're totally insulated from the stock market. "You're probably sacrificing growth potential but a pension is not something to play with," says Mr Broxson.

Our reader, and others nearing retirement, should begin to focus on and assess their total pension package, not just one aspect of it. They should look at their private pension combined with what they should receive from the State. "If it looks less than they can comfortably exist on, they should be putting a little bit more away while there's still time to do it," says Mr Broxson.