Not exact matches
«While self - directed IRAs may offer investors greater diversity or opportunities,» notes the CFTC, «alternative investments
come with their own unique
risks that
retirement savers need to research and carefully consider.»
Bonds can be a core low
risk component of
retirement portfolios, but they do
come with one significant
risk factor: if interest rates go up, the bonds you already own will plummet in value.
The person who has spent the past 30 or 40 years carefully building his / her slow and steady pension pot will have a good sense of
risk tolerance and is unlikely to adopt a gung - ho strategy by starting
with a 6 % withdrawal rate for the
coming 30 or 40 years of
retirement.
By spending just 10 to 15 minutes
with this
risk tolerance - asset - allocation tool, you can
come away
with a recommended mix of stocks and bonds that can help you invest your
retirement savings in a way that makes sense given your tolerance for
risk.
Curiously, Millennials, who generally have the longest time horizon when it
comes to meeting long - term
retirement investment goals, are more preoccupied
with short - term
risks (47 percent) versus GenXers.
1) Start saving early by setting realistic goals 2) Ensure the asset allocation in your portfolio remains in sync
with your level of
risk aversion and overall investment objectives 3) Keep costs and taxes to a minimum by avoiding most high turnover actively managed mutual funds and opting for tax - deferred savings whenever possible (not only do their investments grow tax - sheltered but for most people their MTR at
retirement would be lower than it is during their working years) 4) Balance your portfolio at least annually (some individuals may choose to do so semi-annually) 5) Hammer away at your debt first — for example, when it
comes to contributing to an RRSP or TFSA vs. paying down your mortgage, ideally you should do both.
We know about an investing strategy that beats Buy - and - Hold in 102 out of 110 time - periods, an investing strategy that permits us to obtain far higher returns at dramatically less
risk, an investing strategy that permits us all to retire years sooner and that would bring us out of this economic crisis if we could share it
with millions of middle - class investors (if people could switch to an investment strategy that would put their
retirement plans back on track, they would feel free to start spending again and businesses could start hiring again), and our first reaction is to
come up
with convoluted arguments as to why the best thing to do is to AVOID learning more about it and to AVOID getting the word out to the millions of middle - class people whose lives we have destroyed
with our promotion of Buy - and - Hold.
But while I can't give you a quick and easy answer to this important
retirement question, I can give you advice on how to approach this issue so that you can
come up
with a withdrawal strategy that has a good chance of generating the income you need without subjecting to you undue
risk of spending through your nest egg too soon.
When it
comes to investing for
retirement, you need to create a diversified mix of stocks and bonds that's compatible
with your tolerance for
risk and that has a reasonable shot at generating the long - term gains you'll need to build a nest egg that can sustain you throughout
retirement.
On the other hand, if you're nearing
retirement or you're generally uncomfortable
with taking
risks when it
comes to your hard - earned dollars, playing it safe might make more sense.
Annuity When it
comes to planning your
retirement income, one of your options is an annuity, as this will give you a stable return over time
with less
risk.
This means
coming in
with realistic expectations for yields based on what you are trying to achieve; for instance, someone closer to
retirement, should be looking to maximize their income today in a low -
risk neighborhood.