Today the retirement income landscape looks significantly different than it did in past generations. Previously, it was commonplace for large corporations to fund pension plans that would provide a fixed monthly income for their employees throughout retirement. As you are probably aware, today the typical employer provides a retirement savings plan, most commonly a 401k, where usually both the employee and the employer jointly contribute to that savings plan.
This shift has placed the responsibility for managing investment allocations on the shoulders of the individual. Most retirement savings plans have prebuilt allocations and other online tools to help individuals properly manage the allocation during their working years. However, after retirement, it can be difficult on your own to find adequate help allocating your retirement savings to target your personal income needs.
A few of the pitfalls we see people fall into include:
- Being over weighted to stocks – A large stock market decline during the early years of retirement could make it difficult or impossible to catch up.
- Being under weighted to stocks – Being too conservative could mean that your income cannot increase to keep up with the growing costs of living.
- Chasing “hot” investments – Speculation can lead to losing significant amounts of money which could leave you short on retirement income.
Most of us can find more exciting things to do than make adjustments to our retirement savings portfolio, but not taking this responsibility seriously could lead to running short on retirement income. The team at Master’s has a wealth of experience helping clients design a retirement income strategy and allocating their investment saving to adequately maintain that income.
>What questions do you have about your retirement portfolio? We’d be happy to help!