Building an Efficient Retirement Portfolio
For Young Investors
Maximize returns on risk by investing in a target-date fund, which simplifies asset allocation decisions and is suitable for young investors accumulating wealth.
Approaching Retirement
Seek professional guidance to personalize investment strategies and consider specific risks such as inflation and longevity.
In Retirement
Diversify your portfolio to mitigate risks and generate income. Optimal portfolios vary significantly based on individual needs.
Asset Allocation and Risk
Contrary to popular belief, retirees should not allocate 100% of their funds to stocks. Bonds do not necessarily provide reliable diversification; stock risk decreases while bond risk increases over time.
Tax Considerations
Optimize your after-tax rate of return by allocating bonds to pre-tax accounts and stocks to taxable and Roth accounts.
Managing Longevity Risk
Delay claiming Social Security or purchase annuities to address uncertainties surrounding life expectancy. Personalize retirement plans based on specific longevity projections.
Recommended Planning Age
While planning to age 95 is a reasonable starting point, use free online tools to estimate individual life expectancy accurately.