Retiring is like reaching the finish line of a marathon. A person spends years building wealth and now it’s time to manage and spend that money, but retirement involves the same concerns like tax planning and inflation. Your asset allocation and portfolio composition are vital in retirement as they were during your working years. If you’re 62 and planning to retire soon, structuring your portfolio appropriately is crucial for ensuring your money lasts.
Seek a financial advisor’s help to build and manage your investment portfolio throughout retirement. Find a financial advisor today.
Balance Growth and Security in Investments
Statistically, retirees in America can expect to live into their 80s. This means planning for longevity and continued portfolio growth is vital. Finding a balance between risk management and accumulation is necessary. One approach is to segment your portfolio into sections or “buckets” based on your needs, wants, and growth potential. Secure assets like bonds can cover necessities, while a mixed collection of assets can support lifestyle choices. The remaining portion can be allocated to equities for long-term growth.
Regardless of the structure, the key is to balance your needs for security and growth. More secure assets cover essential expenses, while speculative assets build ongoing wealth, recognizing that retirement isn’t the end of money management. If you need help with asset and portfolio allocation, consult a financial advisor.
Plan for Long-Term Costs
Retirement planning means thinking decades ahead and considering long-term costs. Anticipating inflation is crucial as it doubles the cost of living every 35 years. Your portfolio needs to keep pace with these rising costs. Additionally, consider income taxes on your withdrawals and explore options like a Roth IRA conversion to mitigate taxes. Estate planning is essential in the long run, so consider it as you structure your portfolio for growth and drawdowns.
Meticulous Budgeting is Essential
Retirement demands careful budgeting. Understand your needs, wants, and the kind of lifestyle you desire to have. It’s crucial for both your household budget and portfolio management. Plan for new or increasing costs like healthcare, including additional insurance and potential out-of-pocket medical expenses. Budgeting for these expenses early on will help you afford them when the time comes.
Retirement planning is a marathon, not a sprint. By balancing growth and security, planning for long-term expenses, and meticulously budgeting, you can set yourself up for a financially secure retirement.
Optimizing Retirement Portfolio for the Future
As individuals approach retirement age, it becomes imperative to strategize how their spending, budget, and investments will evolve. Simply put, the conclusion of their professional career does not equate to the termination of fiscal management. As they enter this new phase of life, meticulous planning is vital in order to determine the adjustments required in their investment portfolio and asset allocation.
Seeking Professional Help
A financial advisor can be a guiding light in developing a comprehensive retirement scheme. Finding the right financial advisor no longer needs to be a herculean task. SmartAsset’s free tool efficiently matches individuals with up to three well-vetted financial advisors in their vicinity. This service includes an introductory call with the advisor matches, allowing individuals to select an advisor best suited to their needs. Those ready to accomplish their financial goals can take the first step by finding an advisor through SmartAsset’s free tool.
Reimagining Retirement Investments
- Amidst the focus on saving and investing for retirement, the significance of post-retirement investment strategies often gets overshadowed. However, this phase of investment is pivotal and requires careful consideration. Acquiring knowledge on how to navigate this unique investment landscape is an essential undertaking.
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