How to make wise decisions for your retirement portfolio?
We work hard for years to feed our family and to take care of our kids. And then comes a time for us to live peacefully- Retirement. Yes retirement is the time when we rest and enjoy the fruit of our labour. As you become a senior citizen, you have a lot of assets but you have to organise them and start investing in different levels so that your money may grow. You have to decide how much investing goes to the stocks, how much for bonds etc. Retirement portfolio is the allocation of all your assets to different investments so that you get the maximum cash flow with less risk involved.
While creating a retirement portfolio, you must be careful about a number of things. Otherwise you may experience loss which will ruin your perfect ideas for retirement. Here I will explain a few things to be considered while making your retirement portfolio for investing.
- Know What You Want
While creating your portfolio, you must be certain about what you want and how much risk you can take. For senior citizens, the aim must be to have a long term income source while expecting higher returns. If you have clarity about what you want, you can create a perfect portfolio. Senior citizens may find it hard to plan perfectly. In such cases, you can hire a portfolio manager to do the work perfectly. It is always good to consider the advice of an expert.
- Don’t forget about Savings
While creating a portfolio, investing your whole wealth is not a good idea. After the age of 60 or 65, you are prone to diseases or health problems. Always have a considerable amount of money in your hand so that you are not forced to sell your stocks at low prices in the face of any emergency. And also, you don’t have to be afraid of volatile market if you have savings.
- How much in Stock?
Recent studies show that, as you become older, your risk tolerance capacity gets decreased. So you must limit the percentage of stocks in your portfolio. Stocks are volatile in nature. So senior citizens must decrease or limit involvement in the stock market and move more to equity investments or dividend stocks.
- Investments that provide regular incomes
Having a regular income from the investments you make can reduce risks from the volatile market. Being a senior citizen, retirement life must continue smoothly and equity investments which provide regular incomes (usually annual) or dividend stocks (usually quarterly) will help you meet day to day expenses, healthcare bills and other emergencies. Hence you get salary staying at home even in your retirement. So always have investments with Regular income in your retirement portfolio.