How Soon Before Retirement Should You Adjust Your Portfolio?
- How Soon Before Retirement Should You Adjust Your Portfolio? James Conole, CFP® 27:07
In today’s episode of Ready for Retirement episode James covers when to adjust your portfolio as retirement nears—a crucial step for balancing Growth and Security. If adjustments happen too late, market downturns could delay your plans; if too early, you might miss out on potential growth.
The focus is on reallocating stocks to more stable investments like bonds as you approach the time you’ll need to start drawing from your portfolio. Historical data shows that while the stock market grows over the long term, short-term volatility can be risky close to retirement. Timing this transition, often starting about 10 years before needing funds, provides a smoother adjustment and reduces risk.
Besides financial factors, psychological comfort with market swings also matters. Striking the right balance helps ensure your retirement funds last while maintaining your peace of mind.
Questions answered:
1. When should I start adjusting my investment portfolio as I approach retirement?
2. How can I balance growth potential with stability in my retirement portfolio to minimize risks and ensure financial security?
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Timestamps:
0:00 – Protect against stock market decline
2:22 – Investment fundamentals and market trends
6:12 – When will you need the funds?
8:06 – Risk capacity
10:55 – Consider dividends and interest from bonds
14:20 – Use bonds for a specific purpose
17:07 – Risk tolerance
20:59 – 5-10 years before retirement
24:36 – Goal: minimize risk and regret
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