As you age, how you invest your retirement portfolio should change, balancing growth and income. Individuals may need to change the investment strategy and asset allocation they used in their 30s when they reach their 60s. This shift is necessary to ensure that your portfolio aligns with your risk tolerance, financial goals, and timeline for retirement.
One popular investment option for retirement planning is target-date funds. These funds are designed to age with you by automatically rebalancing your portfolio from growth investments toward more conservative ones as retirement approaches. This hands-off approach can be appealing for those who prefer a set-it-and-forget-it investment strategy.
If you're a do-it-yourself investor aiming to build a 'no babysitter required' portfolio, here are the key steps to take. This includes assessing your risk tolerance, diversifying your investments, and regularly reviewing and adjusting your portfolio based on market conditions and your financial goals.
Target date funds are designed to simplify retirement investing. When you purchase a target date fund, you get a diversified portfolio of stocks and bonds. This can help mitigate risk and ensure that your investments are aligned with your retirement timeline and goals.
According to recent data, Millennials and Gen Z allocate three times more of their investment portfolios to alternative investments than older generations. This shift in investment preferences highlights the importance of staying informed and adapting your investment strategy as market trends and preferences evolve.
The “100-minus-age” rule is a widely recognized rule of thumb in personal finance used to establish asset allocation, the practice of determining how your investment portfolio should be divided among different asset classes. This rule suggests that you should subtract your age from 100 to determine the percentage of your portfolio that should be allocated to stocks.
Discover the average 401(k) balance for different age groups in 2024. Learn how to benchmark your retirement savings and boost your 401(k) to ensure that you are on track to meet your financial goals in retirement. Understanding where you stand relative to your peers can help you make informed decisions about your investment allocation.
While 65 is considered a normal or expected retirement age, let's take a look at what types of investments and things you should consider. As you approach retirement age, it's important to reassess your investment strategy, consider your risk tolerance, and adjust your asset allocation to prioritize income generation and capital preservation.
