What you should know Investing closer to retirement…
Investing your money in preparation for retirement is much different than investing your money during your working years.
Pre-retirees/retirees investments should be more aligned with the low risk allocation bracket of the pyramid of risk (see last week’s post for more information on the pyramid of risk).
Some of these investments include – stock/bond funds, ETFs, CDs, money market funds, fixed/indexed annuities, government bonds, cash/savings, and other insurance products.
These types of investments provide more protection and liquidity of your money. This is important for pre-retirees who will depend on the money in their retirement savings accounts to fund retirement.
Most Retirees no longer receive a salary; therefore, the only source of income is dependent on the money saved in their retirement savings accounts. This is why it is critical to protect this money.
At this phase in life, you cannot afford big market swings and volatility to impact the total value of your IRA, 401k, etc. This is because you do not have nearly as much time to recover that account balance and bring it back to where it was before.
These low-risk investments could fit perfectly into the preservation phase of the money cycle. They provide the potential growth needed to keep up with inflation while assisting in safety and liquidity to fund a person’s lifestyle and expenses that come with it.
Retirement Savings Accounts: Pre-Distribution Phase
Corey Shevlin
Corey serves as an investment adviser representative and handles the investment related administration for The Lynch Financial Group. He currently holds his Series 65, Life and Health Insurance licenses. He attended the University of Delaware and graduated with a Bachelor’s degree in Political Science and Criminal Justice in 2019.