Going “Back to School” on Your Retirement Plan

When you think about your school years, whether your high school, college, or post-grad days, you’ll revisit memorable moments from when you had your whole life ahead of you. Schooling is all about providing students with the tools they need to achieve their future potential. When it comes to retirement planning, the same is true! Believe it or not, you have your whole life ahead of you in retirement as well, so make sure you’re prepared.

Revisit your Risk Tolerance

Ask yourself, is your risk tolerance reflected in your retirement portfolio? Striking a balance between high-risk and low-risk assets across sectors and asset classes that makes sense with your retirement goals is crucial. For example, a retiree may allocate a portion of their portfolio to assets to high-growth technology stocks, while another portion of their portfolio is allocated to consumer staples stocks that pay dividends. You may also want to diversify across asset classes such as real estate or bonds. Everyone’s risk tolerance is different but getting it right can be the difference between a comfortable retirement and one where you’ll need to cut a few corners.

Revisit your Income

The whole point of saving throughout your lifetime of work is to help provide you income in retirement. Well, that time is either here or not too far away. But it means you must ask different questions about your money. For instance, instead of asking how much your money can grow in value, you’ll need to ask how that money can maintain its value and pay you optimized income – either in the form of dividends, interest rates, or withdrawals from retirement accounts.

You’ll also want to consider your Social Security strategy. It’s not as simple as just reaching retirement age and receiving payments. There are reasons to take Social Security payments early or to wait to claim and receive greater benefits. You’ll want to strategize with your other sources of income to figure out what time is best for you so you can get the most out of Social Security.