Re­view­ing Your Re­tire­ment Strat­egy

Just like your health, your re­tire­ment port­fo­lio should get a pe­ri­odic check-up to make sure it’s op­ti­mized and healthy.

Modern Healthcare - - NEWS -

WHY?

Chang­ing ad­just­ments. mar­ket As con­di­tionsvar­i­ous com­po­nentsre­quire in­vest­mentof the strat­e­gy­mar­kets per­form to dif­fer­ent de­grees, the rel­a­tive amounts of the com­po­nents within a re­tire­ment port­fo­lio will change, says Robert Tucker, MD, vice pres­i­dent of wealth man­age­ment at Plan­corp LLC in St. Louis. Th­ese changes can af­fect your over­all risk pro­file.

In or­der to ad­just to chang­ing mar­ket con­di­tions, Tucker says, in­vestors need to weigh the costs of trad­ing with the ben­e­fits of re­bal­anc­ing a port­fo­lio. “Your over­all strat­egy should be re­viewed at least an­nu­ally,” he adds, “while re­bal­anc­ing and tax-loss har­vest­ing op­por­tu­ni­ties should be sought more fre­quently.”

WHEN?

In­vestors near­ing re­tire­ment should con­sider di­ver­si­fy­ing their port­fo­lios to fit their unique cir­cum­stances. For ex­am­ple, set­ting aside funds for an­nu­ities or long-term health­care cov­er­age. “As with many sim­i­lar prod­ucts, th­ese the­o­ret­i­cally pro-

vide a de­gree of se­cu­rity against the un­knowns,” says Tucker. “On an in­di­vid­ual ba­sis, how­ever, the costs of th­ese must be weighed against po­ten­tial ben­e­fits, in­clud­ing peace of mind and lim­i­ta­tion of fu­ture growth po­ten­tial.”

When to ac­cel­er­ate or de­cel­er­ate in­vest­ments is of­ten in­flu­enced by both mar­ket con­di­tions and an in­di­vid­ual in­vestor’s unique per­sonal sit­u­a­tion. The closer an in­vestor is to re­tire­ment, the more im­por­tant it is to in­crease the per­cent­age of in­vest­ments that are in­su­lated from high-risk op­tions.

An an­nual port­fo­lio re­view should be com­pleted with a fi­nan­cial ad­vi­sor; in­vestors with po­ten­tial tax or le­gal is­sues should in­clude their ac­coun­tant and at­tor­ney. “The lev­els of equity, fixed in­come and cash within a port­fo­lio should be de­ter­mined by im­me­di­ate needs, and the ex­pected in­vest­ment re­turn nec­es­sary you need to achieve your goals,” says Tucker. “This should also be re­viewed an­nu­ally, or with any sub­stan­tial life change.”

WITH WHOM?

In­de­pen­dent fi­nan­cial ad­vi­sors are right for many in­vestors, while oth­ers may lever­age ad­vice from ad­vi­sors at their bro­ker­age or mu­tual fund. But most C-Suite ex­ec­u­tives tap a team of pro­fes­sion­als to help man­age their af­fairs. “An ad­vi­sor should be able to help co­or­di­nate the work of all pro­fes­sion­als, in­clud­ing ac­coun­tants, at­tor­neys and in­surance agents, al­low­ing the ex­per­tise of each to be fully uti­lized,” says Tucker.

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