YOUR TIME OF LIFE - 50s EDITION

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Your investment strategy

Strategy                   n. A systematic plan of action.

Some people get lucky (or are extraordinarily shrewd). They make the right investment at the right time, make a fortune, and never need to worry again.

But if you’re like the rest of us, the best way to a comfortable future is through an appropriate investment strategy. It’s a plan of action that suits your situation, including how much money you’ll need, how much time you have until you retire and how comfortable you are with risk.

Striking that balance between what’s ideal and what’s realistic is your challenge this decade. On the one hand, this is your last opportunity to build your assets through aggressive saving and investing. On the other hand, with retirement quickly approaching, you want to protect the wealth you’ve already accumulated.

Retooling your strategy

Review your goals with a financial advisor to ensure your investment strategy fits this time of your life.

At this stage, your investment goals are typically a combination of growth and income. Even if you don’t need the income component to live on, it serves as a way to preserve capital – which is just financial lingo for not losing your money.

To figure out the ideal proportion of growth versus income, you also need to decide when you want to retire, or more specifically, when you need to rely on your money (rather than work) to support you.

The most difficult part of devising an investment strategy is being realistic about how much you can lose without losing sleep.  Your advisor can help run some scenarios to see how you may react. The key is to be honest. Don’t take more risk than you can comfortably handle – this is not play money!


Questions to review

  • How many years before I retire?
  • How much money will I need on a monthly basis?
  • What are my guaranteed sources of income in retirement?
  • How much money do I have in investment assets?
  • How much money will I need to generate from my investment assets?
  • How much more money do you need to save?
  • How can I invest this to reach my ultimate savings goal?


 
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