Updating Your Investment Portfolio to Align with Retirement Goals

Whether you’re a current retiree or a saver nearing retirement age, the beginning of a new year may present the ideal opportunity to analyze your portfolio positions and rebalance them for your current risk tolerance and time horizons.

As you approach or navigate retirement, regularly reviewing and updating your portfolio can help ensure it remains aligned with your goals, risk preferences, and income needs.

Why Portfolio Updates Are Critical for Retirement Sustainability

Retirement, like the birth of a child or marriage, may be a clear demarcation in a person’s financial life. The investment strategy you adopted during your working years may not serve you well after you’ve entered retirement.

Gradually transitioning your portfolio from growth-oriented investments to risk mitigation may be the ideal approach for some savers approaching retirement.

There is no one-size-fits-all solution for portfolio adjustments. Every person or household has a differently sized nest egg and faces unique challenges and risks. It’s important to perform a clear-eyed analysis of your current portfolio in the context of your situation. If you aren’t sure what the best approach is, consider contacting the financial advisors at Fullerton Financial Planning.

The Benefits of Updating Your Portfolio

• Adapt to a lower risk tolerance: Most people become more risk-averse as they near or enter retirement. The goal of portfolio management naturally shifts from aggressive investment growth to wealth preservation. If you’re still working but plan on reaching the finish line in the near future, it may be time to begin transitioning your portfolio into more conservative, low-risk investments and assets.  
  

• Lock down reliable income streams: People nearing retirement may need to consider investment options that generate consistent income, including those with healthy and consistent dividends or interest payments.
  

• Shield against market volatility: Rebalancing your existing investments and diversifying is one of the most dependable ways to reduce your portfolio’s exposure to market fluctuations. If you’d like guidance on diversification strategies, the investment managers and retirement planners at Fullerton Financial Planning are always available to assist.
  

Steps and Considerations for Successful Portfolio Adjustments That Align With Your Goals

Establish Retirement Goals

Defining what your ideal retirement looks like can be difficult when you’re still decades away from reaching retirement age. This process becomes much easier when you’re in your late 50s or 60s and retirement is in sight.

It’s best not to wait until the last minute, since the ways in which you adjust your portfolio to establish streams of income will be highly dependent on your projected lifestyle needs.

If you already have goals, it’s a good idea to perform the necessary calculations and confirm your income will continue to meet your target during the upcoming year.

Reassess Asset Allocation

There will come a point in nearly every worker’s life when they will need to begin allocating assets into more conservative investments that balance growth, income, and risk mitigation. This may involve increasing bond and fixed-income holdings while reducing equity exposure, but the exact strategy will vary depending on each individual’s savings and risk tolerance.

Incorporate Income-Producing Investments

Workers who begin transitioning to lower-risk allocations may also want to investigate more income-oriented investment options. These may include assets like dividend-paying stocks, bonds, annuities, or even rental properties. There are many potential options for people at all different income levels. If you’re not sure which is right for you, it may be time to consult with an experienced retirement planner.

Plan for Inflation

The post-pandemic period has provided a national reminder to workers and retirees that everyday living expenses are far from static. Modern retirement savers and retirees may want to research inflation mitigation strategies, such as investment approaches that combine growth potential and reduced risk.

Celebrate the New Year With a Portfolio Review

Start the new year with enhanced peace of mind by performing a comprehensive portfolio review. If you’re not sure where to start or are looking for an expert opinion, we encourage you to schedule a free consultation with our financial advisors.

At Fullerton Financial Planning, we understand the importance of aligning your investment portfolio with your retirement goals. If you’re looking for a tailored strategy for preserving wealth and generating sustainable retirement income, call us at (623) 974-0300.