How To Generate Retirement Income

Many expats look forward to retirement with the anticipation of relaxing, travelling, and enjoying life at a slower pace. Achieving the lifestyle you aspire to in retirement depends heavily on your planning, pension funds and other investments, and whether they will generate sufficient income to allow you the financial freedom you expect.

It is common to underestimate the value of savings or regular income necessary to enjoy a long, healthy retirement and ensure you have enough of a buffer to cover your living costs and outgoings for the rest of your life. You may also have other priorities to consider, such as supporting family members, helping with education costs, or purchasing a new home overseas.

Even if you consider your assets and portfolio substantial, reviewing the ongoing costs, returns, and available income tied up in your retirement wealth is important, with careful management key to sustaining your lifestyle while generating the income you require.

Retirement Income Streams to Incorporate Into Your Budgets

We automatically think of pension schemes when considering how we expect to fund our retirement. Pensions can be secure, long-term investment vehicles with a broad range of categories, payout structures, and tax implications, all of which you need to build into your plans.

This is particularly relevant for expats, who may need to consider the costs and tax exposure associated with pension transfers, the real-world value of pension benefits paid in a currency other than that used in their place of residence, and the risks of fluctuating exchange rates.

Those planning for retirement might also consider or already hold a wider range of products and assets, including:

• Investment assets
• Property income streams
• Inheritances
• Savings accounts
• Business ownerships
• State pension income
• Part-time employment earnings

The first step to achieving financial security in retirement is to estimate your required annual income and then work backwards to calculate whether your existing funds or anticipated income streams match, or ideally, exceed the wealth you need to finance your plans.

Further guidance on calculating your required pension savings is available in our previous publication, How to Have Enough Money for Retirement.

Comparing Retirement Funds, Investments and Savings Products

It is unlikely that your pension alone will be your sole source of retirement income. Having several assets is a good way to diversify, ensuring that one adverse occurrence will not impact all your wealth.

Varied savings, investment and pension products will also deliver different rates of return, so planning should account for interest rates, forecast returns, and whether your pension funds have a verified payout value or are liable to fluctuations.

Understanding Different Types of Pension Funds

Not all pension products are equal, and you must have a comprehensive understanding of the returns, benefits and terms attached to any pension fund you are relying on as part of your retirement income.

These considerations may be more complex for expats because a pension held in the UK, for example, carries risks if you draw against that fund from overseas. Exchange rates can make regular pension payouts unreliable, and other factors, such as taxation, could influence your decision-making.

The main pension categories are as follows:

• Defined contribution pensions: The amount you receive depends on how much you have deposited into the fund, along with contributions made by an employer where relevant. The fund provider will manage your pension, and the value will depend on how linked investments perform.
• Defined benefit pensions: Considered valuable because they guarantee an income for life, usually based on your salary when in employment. The exact value will depend on your accumulated years of service, your average wage, and the benefits available through your specific scheme.
• Offshore pensions: Designed for foreign nationals living abroad permanently or as dual citizens. They can act as a tax wrapper, which provides efficiencies, particularly if you wish to draw a lump sum from your fund.

Offshore pensions can be further separated into several product types, including Personal Pension Plans, Self-Invested Personal Pensions (SIPPs), and Recognised Overseas Pension Schemes (ROPS), each with varying terms, advantages, and potential downsides.

Once you have established the nature of your pension fund, the forecast benefits, and whether the product aligns with your expectations, you can decide whether to consolidate, transfer or retain each.

Drawing on Your Retirement Income

Pension funds provide varying ways to access your income, normally with an optional lump-sum withdrawal of up to 25% of the value and/or regular pension payments. You may also be able to structure your pension according to your plans, drawing on larger amounts periodically if you do not wish to make monthly withdrawals.

Before making any concrete decisions, it is strongly advisable that you speak with an experienced expat wealth manager to ensure you are aware of your tax exposure and how this may affect your net income.

If there is a gap between your pension income and requirements, there are multiple approaches that may be suitable, whether reinvesting returns into new investments, adding new low-risk investments to your portfolio, or repurposing savings into products with higher returns.

Contrasting Pension Drawdown Strategies

The right solution will always depend on your retirement budget and plans, so working through the steps we’ve outlined is time well spent, ensuring any investment or pension-related decisions you make remain consistent with your expectations.

Retirees can also compare money management approaches, such as using a systematic withdrawal strategy. Rather than withdrawing all available returns from their portfolios, they reinvest dividend and interest earnings to grow their wealth over the long term.

Periodic Withdrawals and Reinvestments: An Illustration

By drawing a monthly amount, retiree expats may be able to maintain a baseline level of invested wealth while ensuring they have a reliable income stream to cover their expenses. Below we’ve summarised a theoretical example to demonstrate how this could work in practice.

• Investor A invests €100,000 in a fixed-term one-year savings product over ten years between 2020 and 2030 and draws 100% of the returns every 12 months. Depending on interest rates, their annual income varies from €700 to €4,210, with a total return of €19,520 over the decade, retaining the original investment of €100,000.
• Investor B diversifies their portfolio to minimise risk, receives around twice the returns, and protects their invested €100,000 from inflation-linked depreciation. After ten years, the original €100,000 is now worth €198,126 – a considerably more attractive sum.

To ensure a steady income stream, investor B regularly draws 5% from their fund. At the end of the ten years, they have not needed to withdraw anything further, have continually reinvested, and have a fund worth €158,680: a 58% growth on the original investment, in addition to the income drawn.

Real-world returns, of course, vary depending on prevailing interest rates, economic conditions, invested capital, product selections and risk exposure. Still, this example showcases why astute decision-making can generate a steady income throughout retirement and improve the earnings achievable from a conventional pension product.

To discuss your retirement plans, investment strategy or savings approach, please contact your nearest Chase Buchanan Private Wealth Management office, or download our Free Retirement Planning Guide.

© Chase Buchanan Private Wealth Management.
Chase Buchanan Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission with CIF Licence 287/15 and offers its services in the EU on a cross-border basis as per the provisions of MiFID.
Chase Buchanan Insurance Services, Agents & Advisors is authorised and regulated by the Cyprus Insurance Companies Control Service with License No 6883 and offers services in the EU on a cross-border basis as per the provisions of the Insurance Distribution Directive (IDD).

Investing in financial instruments involves risk and may not be suitable for all investors. The value of investments may go up as well as down and past performance is not a reliable indicator of future results. You may lose part or all of your invested capital.

*Information correct as at November 2025