These days, people are being way too risky when it comes to their
retirement funds. For starters, a lot of investors are relying too much on
stocks in their later years. With a huge over-reliance on equities and not
enough reliance on fixed income, the retirees of the future are not setting
themselves up for happy, secure retirements.
So, why, exactly are today’s retiree’s so invested in stocks and
equities? Well, a lot of them are trying to make up losses experienced during
the recession while others just love the excitement of stocks. While bonds
might be more reliable, the risk taken with stocks is appealing to some, but in
the long run, isn’t very practical as a sole or major investment strategy.
Investors also tend to prefer the chance of a “big payoff” with stocks to the
slow but steady growth of bonds.
So, what’s a smart retiree to do? Fortunately, the answer isn’t to
steer clear of stocks altogether.
To begin with, take a look at your current investments. If you’re over
the age of 50 and your retirement funds are made up mainly of stocks or
entirely of anything, it’s definitely time to diversify. Talk to your
investment advisor about how you can make smart investments that keep risks low
while still allowing you to have a diverse investment portfolio.
Also make sure you’re getting all of the fixed income that you’re
entitled to. This is very low-risk and well-deserved money, and you don’t want
to miss out on any of it. Check to make sure that, if you qualify for any of
the following sources of fixed income, you are getting them and that you are
getting them to the fullest amount possible:
l Social
Security
l Certificates
of deposit
l Pension
l Short-term
bonds
l Lifetime-payout
annuities
l Inflation-adjusted
bonds
If you can follow these helpful tips and consistently seek help and
advice from a trustworthy financial advisor, there’s no reason you can’t retire
securely in your later years.
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