In recent IELTS examinations, questions about financial planning and retirement have become increasingly prevalent. The topic of retirement portfolio diversification particularly appears in various forms, reflecting its growing importance in modern society. Based on analysis of past papers, this theme often emerges in questions about personal finance, economic security, and long-term planning. Let’s examine some high-scoring sample essays addressing this crucial topic.
Analysis of Essay Question
Some people believe that individuals should be solely responsible for planning their retirement finances, while others think governments should provide complete retirement funding. Discuss both views and give your opinion.
This question explores the debate between personal financial responsibility and government support in retirement planning. As importance of diversification for wealth management becomes increasingly crucial, this topic’s relevance continues to grow.
Sample Essay 1 (Band 8.5)
The debate over retirement funding responsibility has become increasingly significant in modern society. While some advocate for complete individual accountability, others support comprehensive government funding. In my view, a balanced approach combining both personal and governmental responsibility is most effective.
Those supporting individual responsibility argue that personal financial planning promotes better money management and financial literacy. When people are accountable for their retirement, they tend to make more informed investment decisions and develop a deeper understanding of how financial goals impact spending habits. Moreover, this approach encourages individuals to diversify their investments across various assets, reducing risk and potentially increasing returns.
However, proponents of government-funded retirement systems emphasize social security and equality. They contend that not everyone possesses the financial knowledge or means to effectively plan for retirement, and government support ensures a basic standard of living for all elderly citizens. This view acknowledges that how stock market volatility influences investments can significantly impact individual savings.
I believe the optimal solution combines both approaches. Governments should provide a basic pension framework while encouraging individuals to supplement this with personal savings and investments. This hybrid system would protect vulnerable citizens while incentivizing personal financial responsibility and understanding of how high-interest savings accounts benefit investors.
Sample Essay 2 (Band 6.5)
Retirement planning is a big issue in many countries today. Some people think individuals should save money for their own retirement, while others believe the government should pay for everything. This essay will discuss both sides and give my opinion.
People who support individual responsibility say it makes people more careful with money. When people save their own money, they think more about how to use it wisely. They can choose different ways to save, like putting money in banks or buying houses.
The other side thinks governments should pay for retirement. They say some people don’t earn enough money to save, and old people shouldn’t worry about money. Government support helps everyone have a good life when they are old.
I think both sides have good points. Governments should help people with basic needs, but people should also try to save extra money if they can. This way, everyone gets help, but people also learn to be responsible.
Key Vocabulary Terms
- Portfolio diversification (n.) /pɔːtˈfəʊliəʊ daɪˌvɜːsɪfɪˈkeɪʃn/ – spreading investments across different assets
- Financial literacy (n.) /faɪˈnænʃəl ˈlɪtərəsi/ – understanding of financial concepts
- Social security (n.) /ˈsəʊʃəl sɪˈkjʊərəti/ – government assistance programs
- Pension framework (n.) /ˈpenʃn ˈfreɪmwɜːk/ – structure for retirement benefits
- Investment portfolio (n.) /ɪnˈvestmənt pɔːtˈfəʊliəʊ/ – collection of financial assets
Conclusion
The topic of retirement portfolio diversification remains crucial in IELTS Writing Task 2. Future questions might explore related themes such as digital investment platforms, cryptocurrency in retirement planning, or sustainable pension systems. Practice writing essays on these topics to improve your skills.
Share your practice essays in the comments below for feedback and discussion with fellow IELTS candidates.