So, you worked hard, saved diligently for your retirement, and it’s time you want to enjoy the life you have been envisioning along the way. Great! But before you do that, do you have a strategy in place for retirement income—a strategy that can weather inflation, market changes, and unexpected expenses?
Take a look at inflation and interest rate
For you to better achieve your retirement income goals, it is important to determine the necessary actions and decisions that are mandatory to properly manage assets and implement a savings strategy. There is always a conflict between the need for growth to hedge inflation over the retirement period and the need for security.
Since inflation and interest rates are so closely related and have a great influence over each other, Paul Haarman says a zero-risk retirement asset allocation portfolio will slowly reduce the value of the saved money over the life of the portfolio, even with the modest withdrawals. But, zero-risk portfolios generally don’t meet any realistic economic goals. An equity-only portfolio, on the other hand, does have high expected returns, but there is a risk of self-liquidation if withdrawals are continued during down markets. Keeping a balance between the two strategies is arguably the best strategy to maintain a good asset allocation portfolio after retirement.
Maintaining the balance
The portfolio should balance the requirements of liberal income with enough liquidity to withstand down markets. You can start by choosing a sustainable withdrawal rate that can allow the portfolio to grow over time. For example, your 40% investment can be in bonds and the rest in equity. 40% asset allocation to short-term, high-quality bonds in a down market can support distributions for a significant amount of time before equity needs to be liquidated. If the equity shares get appreciated, distributions can be made by removing shares and using the surplus for rebalancing. According to Paul Haarman, you need assistance from experts who know ecstasy and tackle small things that could have a big effect on your portfolio. Verifying small investments to balance all your assets requires the eye of an expert who knows what to do at what time.
Need top-quality assistance regarding retirement investment allocation? There are some of the most reputable wealth management financial planning firms out there with tons of experience in the industry, which help their clients in defining strategies for maintaining a good asset allocation portfolio post-retirement, and manage their wealth with purpose. You can partner with them to make a strategy that can work best for the achievement of your retirement income goals. Partnering with a wealth management planning advisor can help you maintain a great and profitable profile post your retirement.
However, you also need to ensure that you are getting in touch with only the most reliable financial experts. You can find such experts via references or online by going through testimonials of some professionals. Ensure that you do proper research and conduct interviews with the experts before hiring any of the financial experts for assistance.