A solid retirement portfolio can provide income for expenses and may continue to earn you money, even as you begin to make withdrawals. Here are some tips for investing when you are close to or in retirement.
Create an Emergency Account
First, set aside money for the unexpected. Your emergency account should be large enough so that you don't need to sell some of your investments. A good guideline is to set aside enough to cover three to six months of your living expenses.
Balance Risk and Reward
Dividing your investments among stock, bond and money market mutual funds can help balance your portfolio. Although this kind of diversification strategy has been successful for many investors, it cannot ensure against loss.
Know Your Comfort Level with Risk
Preserving your retirement savings is of utmost importance, so most retirees opt for a more conservative portfolio. How much risk you keep in your portfolio is an individual decision, but one you will want to consider for your retirement investments.
Review Your Portfolio
Do a quick check-up on your retirement portfolio.
- Planning for Your Retirement
Find answers to your most important questions about retirement. Whether you are just starting out, already retired, or somewhere in between, this tool can help you plan, invest and manage your retirement investments.
- Fund Solutions for Your Retirement
Explore our two series of actively-managed asset allocation funds.
IRA investment earnings are not taxed. Depending on the type of IRA and certain other factors, these earnings, as well as the original contributions, may be taxed at your ordinary income tax rate upon withdrawal. A 10% penalty may be imposed for early withdrawal before age 59½.