Investing in retirement
You've worked so hard to save, and now you're finally retired. With the right strategy, you can help make sure your retirement savings last.
1. Calculate the approximate amount you'll need each year
Start by calculating your expenses and your expected income from other sources. The difference between these amounts is what you'll need to cover with your retirement savings.
2. Determine whether you can safely withdraw this amount
You'll want to make sure your savings can safely sustain your spending over the next few decades. See what your chances are of making your portfolio last, given your personal asset mix and time frame.
Good to know!
Wondering how to invest now that you're retired? The answer's pretty easy.
For most people, your investing approach in retirement should be the same as it was all along—to determine an appropriate asset mix and then stick with it.
That means you need a balanced portfolio of stocks, bonds, and cash investments that:
- Is appropriate for your timeline (usually 30 to 40 years).
- Meets your tolerance for risk.
This approach will generally give you the mix of growth and income that you need in order to meet your spending needs and sustain your portfolio over the long run.
3. Decide which accounts to withdraw from first
By the time you retire, you'll likely have multiple accounts to withdraw from—along with sources of income like RMDs and fund distributions. Here's a tax-efficient way to use your money.
Get help from a personal advisor
Spending your savings can be a lot more complicated than building them up. And withdrawing assets in the most tax-efficient way can consume time and energy you'd rather spend on other things. A personal advisor can make things easier for you.
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The way your account is divided among different asset classes, including stock, bond, and short-term or "cash" investments.
A complete view of all the money in your account—i.e., not specific investments.
Usually refers to investment risk, which is a measure of how likely it is that you could lose money in an investment. However, there are other types of risk when it comes to investing.