Have recent market declines caused your stomach to churn as the value
of your 401(k) or IRA has plummeted? If so, you are not alone. In just a
few months, investors and those approaching retirement have watched as
their retirement portfolio dropped, sometimes more than 30%.
The good news is that all is not lost. Whether you are planning for
retirement or already retired, there are some measures you can take to
help maximize your retirement savings, despite market fluctuations.
Build Your Retirement Road Map
All taxpayers age 25 and older receive a benefit statement
annually from the Social Security Administration. These statements are a
good road map to figuring how much additional income you will need to
live the retirement life you’ve worked for. From there you can begin to
build and manage your retirement savings.
“Fill Up” on Good Opportunities
What if your local gas station gave a free gallon of gas for every gallon you put in your vehicle? Would you take advantage of the offer? Of course. The same concept applies to your work-sponsored retirement program.
What if your local gas station gave a free gallon of gas for every gallon you put in your vehicle? Would you take advantage of the offer? Of course. The same concept applies to your work-sponsored retirement program.
Many employees offer some level of matching contributions to employee
401(k) or similar plans. Make sure you are “maxing out” what your
employer is offering you.
Are You in the Right Vehicle?
Many investors simply set up their 401(k), IRA or other retirement savings plan and then sit back to enjoy the ride. However, it’s important to periodically make sure that your selections fit your current situation. Just as the type of vehicle you need may change over the years, so too can your investment objectives. While a more aggressive investment may have been the right choice several years ago, if you are within 10 years of retirement, a growth-and-income investment might be a better decision.
Many investors simply set up their 401(k), IRA or other retirement savings plan and then sit back to enjoy the ride. However, it’s important to periodically make sure that your selections fit your current situation. Just as the type of vehicle you need may change over the years, so too can your investment objectives. While a more aggressive investment may have been the right choice several years ago, if you are within 10 years of retirement, a growth-and-income investment might be a better decision.
Remember that retirement savings should be long-term investments
because their value will fluctuate. However, if you are concerned about
consistently weak performers, it may be time to tune up your retirement
portfolio through gradual and well-planned changes.
Always Have a Spare
Your 401(k) or IRA should be part of a broader retirement savings strategy. Just as carrying a spare tire in your vehicle is an important safety precaution, so too is having a backup for your retirement needs.
Your 401(k) or IRA should be part of a broader retirement savings strategy. Just as carrying a spare tire in your vehicle is an important safety precaution, so too is having a backup for your retirement needs.
By diversifying retirement assets across your 401(k), IRA,
profit-sharing and personal portfolio with a combination of stocks,
bonds and mutual funds, you won’t be forced to rely on the performance
of only one plan or investment.
“Rev Up” Your Portfolio
Certainly, the bigger your overall investment portfolio, the more comfortable your retirement is likely to be. Consider adding dividend-paying stocks or income-generating bonds to your portfolio. If you are concerned that you might outlive your retirement savings, then an annuity may be the missing part in your portfolio.
Certainly, the bigger your overall investment portfolio, the more comfortable your retirement is likely to be. Consider adding dividend-paying stocks or income-generating bonds to your portfolio. If you are concerned that you might outlive your retirement savings, then an annuity may be the missing part in your portfolio.
Don’t Forget About the Manual
Most retirement plans allow you to pass assets to your spouse, children or heirs through a beneficiary designation. A well-documented estate plan can also substantially reduce, and in some cases eliminate, estate taxes, leaving more assets for your beneficiaries.
Most retirement plans allow you to pass assets to your spouse, children or heirs through a beneficiary designation. A well-documented estate plan can also substantially reduce, and in some cases eliminate, estate taxes, leaving more assets for your beneficiaries.
Whether you are simply servicing or performing an overhaul on your
retirement portfolio, always select investments that fit your individual
situation.
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