| The best way to plan your retirement fund nest egg is | | | | late. You need to know how to plan on living, and you |
| to layout an investment roadmap early in your career | | | | need to plan on living longer!That comes to another |
| life. Mapping out each phase of your life the important | | | | important financial planning knowledge; how to manage |
| investment portfolio you should have. Financial advisor | | | | longevity risk.What is longevity risk? Simply state |
| recommends a multistage retirement path which | | | | longevity risk is the possibility that you'll run out of |
| needs a multistage approach to investing. In the first | | | | money before you die. Most people start retirement |
| stage, you could be begin with some income from | | | | without realize that their portfolio isn't big enough. So |
| part-time work or side income after retiring from your | | | | what's the solution? Save more when you're working. |
| main career. That steady secondary cash flow means | | | | As you approach retirement, you'll need to reconcile |
| you'll need less income from your portfolio, allowing you | | | | your budget with your portfolio. For example, if you |
| to invest aggressively for growth. Even if you retire at | | | | expect your annual expenses to be around $50K, then |
| 60, you could still have 20 to 30 years ahead of you. | | | | according to scientific financial calculation you may |
| Most financial advisor agrees that you need to be a | | | | need at least $1.25 million in order to satisfy your |
| long-term investor.Once you have entered the second | | | | expenses. Also depending on many factors, such as |
| stage of retirement, in which you retire from work | | | | marker performance, life expectancy, you may not |
| completely, you will need more portfolio income. But | | | | able to withdraw a large sum out of your investment. If |
| financial advisor suggest that you need not invest in | | | | you want your portfolio to last a life time, financial |
| bond too aggressively. Bear in mind that we are | | | | mathematics show that you may not withdraw more |
| coming off a 20 year bull market in bonds in which | | | | than 4.5% per annum; assuming your portfolio carries |
| investors were rewarded with both income and capital | | | | at least 60% in stocks.Financial advisor recommends |
| appreciation that came from falling yields. As interest | | | | retiree to invests in both short-term and long-term |
| rates fall, older and higher yielding bonds became more | | | | growth. One of the recommended investment |
| valuable. Now that long term government bonds yield | | | | strategies is to invest five year or more of living |
| less than 5 percent, so there is not much to | | | | expenses in high quality bonds, some which will mature |
| gain.Seriously speaking, financial advisor recommends | | | | every year. For example, you may buy $50K worth of |
| that retiree really need a strategy that is a bit more | | | | 1 year bond, $50K worth of 2 year bonds and so on. |
| sophisticated particularly if they want their money to | | | | This strategy ensures that retirees will have income |
| last through the third or sunset stage of retirement. | | | | every year, plus access to the principle as each bond |
| This is more evident with raising health care and living | | | | or group of bonds matures. You may then sell some |
| costs.As such, financial advisor recommends that you | | | | stocks to repurchase another year worth of bonds |
| invest in the following portfolio:1.Midcap stocks | | | | set to mature in another 5 years. However, what |
| 10%2.Small cap stocks 10%3.International stocks | | | | happen if your portfolio suffers a bad year or two? In |
| 10%4.Short-term fixed income 30%5.Large cap stocks | | | | this case, you should hold off selling stocks; and if you |
| 40%Your retirement nest eggs should continue to | | | | have gains in any year, then you may invest in more |
| grow with the stocks market while the bonds cover | | | | years ahead. The rest of your portfolio can then be |
| living expenses. In order to achieve success in | | | | growth-oriented invested entirely in stocks.Another |
| retirement finds investing; one thing everyone should do | | | | way of investment is to buy an immediate annuity with |
| is not to procrastinate in your aggressive retirement | | | | big enough payout to cover costs from health care |
| funds investment planning. Some people view | | | | insurance, taxes and living expenses.However you |
| retirement as some event that is too distant and don't | | | | may want to wait until your second or third stage of |
| save enough. But once they hit retirement age, | | | | your retirement before you purchase an annuity, |
| suddenly they realize they don't know anything and too | | | | because the payout is larger for an older buyer. |