It's that time of year again for all retirees to reassess their income for the coming financial year. Do you need to increase your monthly income to keep pace with rising petrol and food costs or are you one of the lucky ones that can absorb some of the costs inside your existing income levels?

With negative returns over the last 12 months; those drawing an income from their funds have experienced a reduction in their portfolios that could make even the most experienced investors cringe!

From 1 July all retail pension providers will look to your age and your account balance to calculate the minimum income to be payable from account based pensions (the new name for allocated pensions). What does all this mean? Basically, given the current market conditions, and the subsequent fall in your portfolios, the minimum pension will most likely be reduced for the year ahead.

Thus if you are currently drawing the minimum pension, your provider is working against you when considering your rising living expenses.

So if you do increase your income to meet rising inflation, you must ask yourself is your capital going to expire before you do.

These are the times your relationship with your Financial Adviser is crucial. From our point of view, delivering news of negative returns is never an enjoyable experience, but it gives us the opportunity to further educate on the volatility in markets and reiterate the reasoning behind our initial conservative long term projections.

Receiving a report from your product provider is not receiving advice! You require more during this time, you can gain a lot of comfort and peace of mind by re modeling your capital over the term to your life expectancy while taking into account the higher level of inflation we have been experiencing. At worse, you may need to reassess your goals, but information is power, wouldn't you rather know now if you need to make changes rather than after your capital has run out?

And don't forget a reduction in your capital could result in a higher Age Pension entitlement, so keep your reporting up to date - something else your Adviser can assist you with!