Congratulations, you are nearing retirement! You have spent your career working, saving, and let’s be honest, likely dreaming about getting to this point. As you start thinking about what retirement will look like, you may envision more leisure activities, visiting with family and friends, possibly opportunities to travel or work on a hobby. All of those are excellent retirement plans.
It’s also important to keep an eye on your investment plan. Hopefully, you have had the ability to set aside some of your employment income in a retirement savings plan – like a 401k or an IRA. Perhaps you even have some savings outside of your retirement plan that you have been or would like to invest. Your ability to save is the number one factor in your retirement success. Proper management of your investment savings is a close second.
Hopefully, you will enjoy a nice, long retirement. We want to be sure your savings are appropriately invested to pursue a growth rate to sustain your lifestyle for that entire period. At the same time, now that you are exclusively living off your retirement income, we need to be sure your funds are stable and accessible.
Taking more risk than necessary is never advisable; in retirement, mitigating risk exposure is especially important. Your portfolio should have just the right amount of market exposure to pursue your required growth rate, while also offering the stability to provide income when needed.
A moderately allocated portfolio with approximately 60% in stocks and 40% in bonds and cash will typically offer opportunities in that sweet spot combining both growth and stability. However, there are no “one size fits all” portfolios. Working with a trusted financial advisor is a great way to review your investment plan and ensure you are properly allocating your portfolio to pursue all your retirement goals.