Smart investment strategies for building wealth may look a little different if you’re nearing retirement or already retired. With little room for error, if you aren’t taking the right steps, you could end up missing out on valuable income that you need to live comfortably in your retirement years. In order to make your money last, here’s what you need to know about investing after you retire.
Know There’s More At Stake
Most financial advisors will tell you not to gamble with your nest egg. Without a steady paycheck to turn to, there’s no option to earn back the money you’ve saved up, so it’s crucial that you continue to make smart investment choices. Upon retiring, meet with your financial advisor to do a check of your portfolio. As long as it’s well-equipped to allow you to live comfortably, then you may just choose to keep it that way.
Get Back to Budgeting Basics
Remember the days when you used to write out a budget every month? Those days may be making a comeback. It’s easy to skip budgeting when you can rely on a paycheck every month. In retirement, however, a budget is important because it can help inform your investment choices. Monthly fixed expenses should be tied to a source of fixed income, like Social Security or a pension. If there are any gaps, you can decide from there how you’ll cover the rest. The key is knowing your budget so you can maximize your time with your financial advisor.
Embrace Retirement Life
What about the non-necessities? You may be looking forward to traveling or buying a second home. Depending on your budget and if you’re flexible on your timing, reinvesting some of your assets might be an option for you. If the stock market is down, you can postpone a big purchase so you’re not cashing out at unfavorable rates. Embracing the retirement life, while also building wealth, is all about flexibility and timing.
Stay in the Stock Market
Many retirees think that if they have a low tolerance for risk, they should avoid the stock market. This simply isn’t true. In fact, most retirees who meet with us are surprised to learn that they can invest more than they thought. As long as you have a smart strategy for your money, then you can invest in the stock market and tolerate its volatility. Your financial advisor will help you come up with a formula that’s right for you.
Retirement isn’t synonymous with carefree living, especially when it comes to your money. Even though you should embrace the retirement lifestyle you want, make sure your investment strategy can support it. Set up a meeting with a financial partner at Sterling Advisor Group. For more information on investment strategies that are right for you, contact us today at (480) 729-8000.