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.

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.