Are you approaching retirement age? Are you ready to retire or are you already retired? If you answered yes to any of these questions, do you have an investment strategy? As you approach and reach retirement you will want to take a close look at your financial portfolio and possibly make some changes in order to secure your retirement funding. While you will most likely want to shift to a more conservative portfolio, at the same time you will still want to grow your investments. Read on for some great strategy tips you will want to consider.
Maintain A Diversified Portfolio
Even though it may be tempting to put all of your investments into safe funds, you may want to think twice. While you will want to be conservative with most of your money you may want to consider leaving some in potentially higher yield stocks. Overall, you will still want to diversify keeping around 20% in stocks and the rest in bonds, global investments, CD’s, money market accounts, etc. With life expectancy today being high, you will want to make sure you have enough to live comfortably and you may not be able to do that if you invest too conservatively.
As You Approach Retirement Plan Wisely
If you have not yet retired but are approaching retirement age it is now a good time to take a close look at all of your retirement accounts. If at all possible you will want to make sure you have maxed out your contributions. Additionally, it may be in your best interest to save as much additional funds as possible in safe investments that are not typically retirement accounts like CD’s and money market accounts. In today’s world, you can never have too much money saved.
Consider Bonds
Bonds are highly recommended as an investment tool for retirees. There are different types of bonds and you will want to choose the type that will best fit your financial situation. Depending on your financial situation you may want to consider municipal bonds. While they do not yield the same rates as a traditional bond they generally offer a tax free way to invest. If your income bracket is high this is especially a good investment option. Taxable bonds do offer a higher rate or return so lower income retirees may be better off choosing this type.
Be Tax Savvy When It Comes To Using Your Retirement Funds
When it comes to withdrawing funds in your retirement you will want to plan wisely. For most people a monthly withdrawal to cover your living expenses is advisable. Before deciding on a figure you will want to calculate what other benefits you will have coming in. For example, you will want to determine how much your social security check will be and add in any pensions or other benefit checks you will receive on a regular basis. Finally, it is always best to use your funds with the smallest tax liability first. You will want to start with any tax free options and go on from there. Of course some accounts may require you to start withdrawing a certain amount when you reach a certain age, so you will want to factor that in as well.