Case Study: What Should My Investment Portfolio Include?
As you approach retirement, your investment strategy must shift from aggressive growth to a focus on income generation, asset preservation, and moderate growth to outpace inflation.
Consider this common scenario: “I’m 65 years old and plan to retire in two to three years. With money in both 401(k)s and CDs, which should I prioritize?” It’s all about finding the right mix of investments for your unique situation.
Join David Shapiro in this week’s Better Money Boston with WCVB Channel 5 to learn how you can help extend the lifespan of your retirement savings.
Shift Your Financial Mindset
Your approach to investing should begin to evolve not just two to three years before retirement, but even five to seven years in advance. Until now, your primary focus has likely been on growth. But eventually, you need to create a clear strategy to convert your savings into a steady, reliable income stream that can support you for the rest of your life.
One of the biggest mistakes we see people make is waiting too long to make this transition, leading to missed opportunities for tax efficiency and risk management. While growth remains important in retirement, generating income becomes essential at this stage of life.
Understand Your Risk Tolerance
It’s critical to have a systematic plan in place to reduce risk in retirement. When you were younger, you could afford to take on higher risks with your investments because there was more time to ride out market fluctuations. But as you think about your portfolio now, the impact of market downturns becomes more severe. For instance, a 20% loss can deplete your savings a lot faster than expected, and you have fewer years to recover.
Consider Fixed-Income Vehicles
To help stabilize the risk-return ratio of your portfolio, consider incorporating fixed-income investments, such as annuities, government bonds, CDs, or money market accounts. Fixed-income vehicles not only provide a degree of stability and steady income but also help diversify your portfolio to mitigate risk.
As you consider your options, make sure you have an actionable, comprehensive income strategy. You should know where your income is sourced and how each investment or account works together to provide a tax-efficient, long-lasting retirement paycheck.
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
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