Are you approaching retirement age and starting to think about your financial future? Have you begun gathering insights for your Medicare application? Gentlemen, it’s never too late (or early) to start creating a retirement portfolio that will thrive.
With the right techniques in your mind, you can ensure that you have enough income streams to live comfortably during your golden years. In this blog post, we’ll explore key strategies for building a successful retirement portfolio to help you achieve your financial goals.
Bring in Two Safety Nets to Your Retirement Portfolio
First off, let’s talk about the best way to protect your downsides: Having safety nets in place. While you may have invested in stocks and bonds, be sure to also keep cash on hand for emergencies. One strategy is to bring in a year’s worth of spending cash that can cover unexpected expenses without selling your investments at a loss.
Additionally, it’s recommended to have two to four years’ worth of living expenses saved up outside of your investment portfolio. This cushion will provide security during market downturns or other financial crises that could impact your investments.
Strike the 60/40 Balanced Portfolio
When investing in your retirement portfolio, the 60/40 balanced portfolio has long been a go-to strategy. And it’s for a good reason: this approach involves 60% of your investments going into stocks and 40% into bonds, with the idea that you’ll benefit from both growth potential and stability. But is this still the best approach? The answer depends on a few factors. For one thing, there’s no guarantee that past performance will continue into the future. Plus, interest rates are currently at historic lows, which means bond returns might not be as strong as they once were.
Some experts suggest revisiting this strategy and taking a more flexible approach to asset allocation based on market conditions. It might make sense to tilt towards certain sectors or asset classes depending on what’s performing well at any given time.
Keep in Mind All Your Income Sources
When creating a retirement portfolio, you can’t overlook any potential income source you’ve got. Many retirees rely solely on their savings and investments, but there are other avenues of income that should not be overlooked. Social Security benefits can provide many individuals with a significant portion of retirement income. Understanding how these benefits work and when you’re eligible to receive them can also do wonders.
Pensions from previous employers may also contribute to your retirement income. Real estate can also be a passive income source during retirement. Rental properties or even selling off excess property could provide additional funds to supplement other forms of retirement income. Creating a retirement portfolio that will thrive takes careful planning and strategy. Ultimately, note that everyone’s retirement goals and needs are unique. It pays to invest in hiring a financial advisor who can help tailor an investment plan specific to your unique situation.
