20 Financial Considerations for Retirement
8. Create and Sustain an Investment Strategy
An important financial consideration when it comes time to plan for retirement is creating an investment strategy for retirement. The strategy takes one’s investment plan and allocates the funds based on a preferred weighting of the investments. Over time, it is typical for investors to rebalance the allocation percentages based on risk and performance. The rebalancing should not be based on market peaks and valleys; rather, based on other milestones such as age of the individual balanced with the amount of risk that should be assumed when compared to the time available before reaching retirement. Many times, investors will make “paper” loses into real ones by moving investments out of underperforming stocks or bonds on bad days and miss out on the recovery gains. Sticking to a plan helps avoid these issues.
