For those in their fifties, retirement may be closer than they think. And with so many unknowns surrounding President-elect Trump’s policies on taxes, Social Security and health care, there's no better time to revisit your retirement portfolio..
While necessary, the task of reordering your finances can be daunting, especially during a transition period. Available to share his expertise is NYC-based financial advisor Ryan Payne. The President and co-founder of Payne Capital Management, Ryan specializes in a personal approach to financial planning.
Here’s what Ryan says you need to know about planning for retirement:
- Build a portfolio that is income oriented; relying on capital growth as you near retirement is risky, but income generating portfolios assure with high certainty a steady cash flow
- Stay away from target-date funds while transitioning assets; most target-date funds are not very diversified and for the fixed income component of a target fund, bond funds are utilized. There is no maturity on a bond fund, so there are no assurances your principal will be returned
- Finding the right formula for re-balancing is key; re-balancing your portfolio roughly every 12 months is optimal, and it’s important to utilize significant volatility in the markets
- When it comes to cash, only keep 6 to 12 months worth of your expenses in cash; not only is money earning at 0%, but inflation is one of your biggest enemies as you near retirement
Ryan’s last words of advice? When putting together your portfolio, build one that is goal-based for your specific needs. Make sure to keep in mind your retirement income needs, taxes, and estate before building an investment strategy plan, and stay away from bond plans!