It’s easy to think about retirement as a faraway promised land. Sure we’ll get there one day, and we’ll even prepare for it, but what happens when you finally get there? Preparing for retirement takes planning and discipline. If you plan to stop working entirely, you may have two decades or more during which time you’ll need financial security. There are plenty of plans to help you make sure you save enough, but it’s equally, if not more, important to make sure that you continue to manage your money wisely after you retire. With careful management, you’ll ensure that you have more than enough to provide for you all the rest of your days. You’re planning for retirement while retired. This is an important task for which you’ll want solid guidance. Here are the ways retired people typically have to tweak their investment and savings strategies.
- Ensure that you have enough saved. A financial advisor can help you determine whether or not you have enough saved for your needs and goals. If not, he or she can help you make up the difference through investment and other strategies. If there is a large gap between what you want and what you’ve saved, there may be ways to leverage your assets to give you the security and lifestyle you desire.
- Make sure your investments are properly allocated. This process is as simple or complicated as your portfolio, but is easily explained using the example of stocks and bonds. If you have mutual funds, as most long term investors do, you have chosen a percentage of your funds to tie into stocks and bonds. Of course, bonds are much more secure, the government never having defaulted on bond payments in its history. But they offer little growth potential, usually hovering just above the rate of inflation. Stocks have great growth potential, but are always at risk of losing value. This keeps many older investors away from a stock-heavy portfolio. Have an advisor help you determine the right balance between risk, growth, security, and your goals.
- Make a plan for the growth of your investments. This is part and parcel with the previous bit of advice. A stock/bond allocation that you are comfortable with, and the allocation that you need to grow your funds adequately, may be two different ratios. But it is important to understand exactly what you’ll need for the future, and exactly how you will accomplish it. Look carefully at what you want, what you have, and how you can make up the difference.
- Be flexible. You’ll want to tweak your investment strategy throughout your retirement. You will have ups and downs that make change appropriate. Having someone on your side to help with these decisions is always a good idea, but your years of investment experience will also serve you well.
Depending on who is reading this, retirement may be far away or close at hand. If you are currently retired, there are plenty of way to make sure that your savings and investments are sufficient to make your retirement great. Spend some time with your portfolio and with your financial advisor, to optimize your money for the best possible retirement.