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Move My Money Into Safer Territory?

With the market going up and down like an elevator recently, I have been receiving a lot of questions like this:

How and when should I move to a safer retirement portfolio?

Great question. Or I am given specific situations like this:

I’m in my early 50s and plan to retire a little before I hit age 60. My savings are now invested in a combination of stock mutual funds and company stock. When and how should I start allocating to a safer portfolio?

I want to speak to both of these to try and help the couple or person out there in this predicament. Whether you’re just being cautious by doing some advanced preparation or you’re concerned that the recent stock market roller coaster is a preface to an impending market crash, you’re correct to start thinking about how to transition your retirement savings to a more stable position well before you actually can retire.

After all, investing heavily in stocks may be okay when you’re younger and more apt to take the risk for higher returns since you have plenty of time to rebound from market setbacks. But an overly aggressive investment strategy that leaves you vulnerable to severe market dips as you near the end of your career can be catastrophic.

A significant drop in the value of your nest egg just before or soon after retiring can dramatically reduce the chances that your retirement savings will be able to support you throughout a long retirement and outlast you. We definitely don’t want you to last longer than your money!  The reason is that the combination of an investment loss plus withdrawals from your savings for retirement income can deplete your portfolio’s value so quickly is that it may not be able to recover sufficiently in time even after stock prices begin rising again.

Unfortunately, whether due to complacency, failure to comprehend the risk you’re taking or some other reason, many people fail to dial back their stock holdings as they enter the home stretch to retirement. For example, an Employee Benefit Research Institute report found that prior to the financial crisis, when stock prices plummeted nearly 60%, more than 40% of 401(k) participants between the ages of 56 and 65 had over 70% of their account in stocks, and nearly 25% had more than 90% in equities.

Ask yourself these questions:

“Am I taking too much risk with my money?”

“So how can I get adequate protection against market setbacks while also providing enough long-term growth potential so your savings will be able to sustain you throughout a retirement that, given today’s long lifespans, could last 30 or more years (or in your case even longer)?”

If the answer is “Yes, or I want to discover how” then take action to protect your hard-earned money by allowing us to move some of it to safer territory. Why take the risk when you don’t have to!

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Set up a no-cost, no-obligation meeting with me in person at either our Bowling Green or Louisville office and move you to safer territory today!

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