Whether you’re working with financial professionals or doing your retirement planning by yourself, there are guidelines that can help you get a jumpstart on your financial planning as an empty nester. Although some may think that it’s bit too late to establish the proper strategies due to financial obligations such as mortgage payments and college tuition fees, you can still take control of your situation and take steps to attain retirement security. Here are some suggestions:
If you’re an older empty nester who’s nearing 65, you can benefit from reducing the equity portion of your retirement portfolio. Don’t go overboard, though, and place everything into cash – statistics peg that you’ll live for around two more decades, with a 50% chance that a single 65-year-old retiree will live to 85, and at least one of the partners in couples aged 65 will see 91. These statistics show that if you don’t have a large amount of money saved up, you’re unlikely to stretch your funds to last you throughout the rest of your life.
Because of this, experts say that you should consider lowering the equity part of your investment portfolio from around three-fourths to approximately 60% by age 65. If you have little in the way of pension funds, you could lower your equities to half of your entire portfolio or lower. This will help buffer your portfolio against hard losses that market swings come with.
Strategies for allocating your assets are going to be very different from the way you shuffled your investments in your younger years. You probably had higher portfolio risk, and you’ll have to cut back on it as you grow closer to retirement. You’re going to be withdrawing from you r pension, compared to bulking it up, making these retirement planning guidelines useful to you and other empty nesters.