The Need and Importance of Portfolio Management Strategy

As you age, it’s important your investment portfolio management strategy does, too. Learn 5 tips to get your portfolio strategy on track for a successful retirement.

It’s easy to put money aside in an investment account and forget about it until it’s time for retirement. However, just as you mature and evolve, so should your investment portfolio. There is a strategic balance between risky and conservative investments that should be matched to your retirement timeline.

It’s no secret that Americans are largely unprepared for retirement - and many don’t even know how unprepared they are. A survey from Bankrate found that 61 percent of Americans did not know how much they need to have personally saved to fund their retirements. Knowing how much you will need in retirement is a crucial first step to a financially healthy retirement. Many experts recommend you should have at least $1 million for retirement while other experts argue that with increasing longevity, $1 million may not be enough.

5 Tips for a Successful Portfolio Management Strategy

No matter your retirement and financial goals, it’s prudent to monitor your portfolio, especially as you near retirement, and make adjustments when needed to hit your personal retirement goals.

1. Take inventory of your assets.

How you manage your assets largely depends on the amount of money you have when you begin retirement. Most retirees will begin retirement with a modest amount of money but will still need to tap into their principal at some point in retirement. Having a sound investment strategy will help ensure that you don’t run out of money in retirement. A fiduciary financial advisor can help you conduct a thorough financial assessment so you know where you stand in comparison to your retirement goals.

2. Reconsider your balance between risky and conservative assessments.

As you near retirement, you may want to rethink your more risky investments because you won’t have as much time to recover from any failed investments. Take a close look at your portfolio and assess if you have a greater proportion of higher-risk investments than you should, given your investment time horizon. You will want to diversify your portfolio so that your retirement income will be protected from swings in the market with more conservative investments.

3. Consider selling investments.

If your investments are worth more than you paid for them, you could consider selling some of them for retirement income. Before selling any investment, you will want to consider the taxes on any sale. You may have to pay capital gains taxes on the profit so be sure to plan ahead and be strategic if you sell off investments.

4. Be open to new opportunities.

While being mindful of your risk balance, don’t forget to be on the lookout for new opportunities. Keep your eyes open, do your research, meet regularly with a financial advisor and you may find a new investment opportunity is awaiting you in retirement.

5. Partner with a fiduciary financial advisor.

There is a need and importance of portfolio management strategy as you near retirement. Having a second pair of trained eyes on your portfolio is a great way minimize risk and ensure you’re preparing for your retirement. Fiduciary financial advisors are trained to spot areas of concern, missed opportunities, and evaluate your risk balance. They can help you meet retirement goals and professionally manage your investment portfolio for better financial health. Connect with a financial advisor to gain control of your investment portfolio and financial future.

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