People spend a lot of time fretting about how much income to draw from their pension every year. There is another, equally important question, however: what do you invest your money in?

On the one hand, you want your savings to grow so they can sustain you through your whole retirement. On the other hand, you don’t want to take on too much risk; volatility can be financially and emotionally draining.

Over the long term, equities generally outperform other asset classes, but they bounce around from year to year. On the flip side, holding everything in cash or bonds may give the illusion of security, but that’s all it is. If you are overly conservative, you are more likely to run out of money.

Conventional wisdom states that you should derisk your portfolio as you get older. You do this by shifting from equities into government and corporate bonds. Everyone is different, but at Fidelity a ‘middle of the road’ approach might be 40% in stocks and 60% in bonds, or a half-and-half split.

For some people, asset allocation isn’t static. They reduce their stock market exposure as they age, on the basis that their time horizon is shortening with every passing year. There is even a (very rough and ready) rule of thumb for this: subtract your age from 100 and this is the proportion of your portfolio that should be in equities.

Others use a cash buffer to manage volatility. Fidelity investment director Tom Stevenson experimented with this approach recently, in an article about how to deal with market crashes in retirement.

In 2014, two American financial planners, Wade Pfau and Michael Kitces, published a paper called “Reducing Retirement Risk with a Rising Equity Glide Path”. It’s not the snappiest of titles, but the report grabbed the attention of the industry by proposing a startling idea: that people should increase – not decrease – investment risk as they age.

“Results show, surprisingly, that rising equity glide paths in retirement – where the portfolio starts out conservative and becomes more aggressive through the retirement time horizon – have the potential to actually reduce both the probability of failure and the magnitude of failure for client portfolios,” the report concludes.