"I realised four years ago that I had built up a good enough pension and investment portfolio to enable me to cut down on my hours at work," she says. "My pension will be sufficient to cover everyday expenses, but it is the income from my investments that will pay for luxuries such as holidays abroad and my golf club membership."
In order to be in this position, Jean's investment strategy needed to change. Over the years she had saved money in a building society and invested for growth in unit trust funds and investment trust shares.
However, she needed to look at investments which would offer her a good income in retirement, says her independent financial adviser Rory Thomson, a director at James & George Collie in Aberdeen.
"Jean had a diverse portfolio, but we decided to reduce the risk and transfer into income-producing funds. We have moved away from equity investments into low-risk corporate bond income PEPs and low-risk with-profits bonds. As Jean is still working part time we have not needed to take the income from these investments, but when she retires we will," he explains.
The bulk of Jean's investment portfolio had been in three growth unit trusts: Perpetual UK Growth, Schroders UK Enterprise and Schroders European. Jean had not used her PEP allowance in the past, so Rory could not simply transfer the cash from one PEP fund into another.
Instead, he has sold units in the trusts each year and invested this money in corporate bond PEPs. In the last four years, Jean has transferred pounds 12,000 into the CU Monthly Income PEP and pounds 12,000 into the M&G Corporate Bond PEP. These funds offer an annual yield of 6 to 6.5 per cent.
The rest of the money from the original unit trusts has been invested in Commercial Union's with-profits bond and Scottish Widow's with-profits bond. These bonds are paying annual bonuses of between 6 and 6.5 per cent.
"The original growth investments produced next to no income because all the earnings were reinvested. In the last four years we have reduced the risk and moved over to investments that provide tax-free income of about 6 per cent, and there is the potential for capital growth," says Rory.
On top of this, Jean still has pounds 8,000 in a building-society account and a fully funded Tessa. She has also kept her investment trust shares, which should provide some growth; she hopes to move these into an individual savings account after April.
Jean is lucky enough to be able to switch to low-risk investments to provide her with enough money to supplement her income. But those requiring less income or greater capital growth than she is likely to achieve may want to stick to equity funds.
The first thing to do when moving from growth funds into income funds is to work out exactly how much income you need. The more income you need, the less opportunity there is for capital growth.
A unit trust fund in the UK equity growth sector will yield 1 to 3 per cent a year, but there is potential for capital growth - whereas a fund in the UK equity income unit trust sector will yield 3 to 5 per cent. If you have invested through a PEP, this income will be tax free and there is still the opportunity for capital growth to ensure a growing income over time.
If you need more income than this, a UK equity and bond income fund may be a better option, and often the income is paid out monthly. These funds invest in fixed-interest bonds as well as equities, so the income levels may be higher, but there is less potential for capital growth.
Alternatively, investors may want to move into a UK fixed-interest fund, whereby all your money is invested in fixed-interest assets such as corporate bonds. Income may be paid monthly or quarterly. The typical yield is 5 to 7 per cent.
For more income, you could invest in the income shares of a split-capital investment trust. The income on these shares can yield up to 9 or 10 per cent. These funds offer higher yields than other funds because the income shareholders make up only a percentage of the total number of shareholders in the fund, but receive all its income.
Before you decide to switch from a growth fund to an income fund, it is worth double-checking exactly what type of fund you are in, as it is not unusual for growth investors to invest in income funds.
If it turns out that this is what you have been doing, all you need do is to start drawing out the income from the fund rather than reinvesting that income for growth.Reuse content