Feast or Famine? Three Steps to a Healthy Retirement Portfolio

Saving regularly for retirement, such as contributing to your employer’s retirement plan, is an important step toward a more secure future. The types of investments you choose is also important.

Will it be feast or famine in retirement?

The investment choices you make today could affect your future lifestyle. For example, it could be the difference between eating steak dinners or value meals in retirement. Consider the following three steps to help build a healthy retirement portfolio.

1. Pick a balance mix from your portfolio menu

In general, you should choose a variety of investment types that react differently under various economic conditions.

Your Investment Menu

2. Divide your portfolio plate

What’s on your portfolio plate depends on what’s unique about you. A financial professional can help you make asset allocation decisions. Before you talk to a professional, it may help to understand what your investment choices should be based on.

How much time you have to invest

Your age and how long you have to retire can help you determine what percentage of your investments should be allocated to each asset type.

 

How you divide your portfolio allocation depends on you risk tolerance.

Sample portfolios are for illustration purposes only and do not represent any particular investment or recommendation.

 

How you feel about risk

Your risk tolerance is how you feel if the value of your investments changes due to market conditions.

 

How you feel about risk

 

 

3. Revisit

While you want to take a long-term view of your investments for retirement, once you have your asset allocation in place, it’s a good idea to review it from time to time.

Nearing retirement

As you get closer, your time horizon changes and you may find your tolerance for risk changing too.

Changing markets

Market conditions over time can also be a good reason to review your asset allocations.

 

The bottom line

A healthy asset allocation is similar to eating a well-balanced diet. It may take some discipline, but the payoff in risk reduction may help protect your portfolio and ultimately, your retirement dreams. Learn more about asset allocation and how it may help your investing goals.

 

This information is for educational purposes only and is not intended as tax advice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

Diversification does not assure a profit nor does it protect against loss of principal.