5 Considerations to Help You Retire Wealthy

(Image credit: gradyreese)

If you want your nest egg to be robust when you’re ready to retire, you have to take care of it now. That means careful investing and saving. You can’t just go out there and wing it.

Here are five things to consider as you build and manage your wealth.

1. Reduce your risk.

If you lose 10% of your savings when you’re young — say, $1,000 of your $10,000 — it’s a blow. If you lose 10% of the $1 million you have saved for retirement at 65, it will feel like a knockout punch. Know your time horizon and how much risk you can tolerate. Your portfolio will thank you.

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

2. Build a solid foundation.

Make sure your retirement’s financial needs are covered and locked in years before you actually call it quits. Set a practical budget and work with your financial professional to draw up a plan that includes a structured way of drawing income from certain assets, implementing cash flow on others, dealing with inflation and taxes, and taking asset protection into consideration in case you or your spouse need long-term care.

3. Hedge risk through diversification.

There's an old joke that underscores the risks of investing: “How do you make $1 million in the market? Start with $2 million.” It’s OK to take some risk, but hedge the downside so you don’t lose everything. Don’t go all in on any one investment or asset class; keep a diversified portfolio. Talk to your financial professional about risk-management options.

4. Have realistic expectations.

You don’t retire wealthy by making huge returns — you do so by saving your money and avoiding costly mistakes. Slowly and strategically shift your focus from accumulation to preservation as you draw closer to retirement. Conservative investments aren’t as exciting as hot stocks, and you can’t brag about them at the club, but when your portfolio is secure, it can help you have more confidence in your financial future. If you need an occasional thrill, you could always pop into the local convenience store and buy a lottery ticket — but only occasionally.

5. Leverage those who know more.

If you wouldn’t set your own broken arm or defend yourself in court, don’t imagine you’re an expert in retirement planning. Consult with people who have experience in taxes, estate planning and other areas of financial advice. They can help you, and hopefully, you will make fewer mistakes and have a much better chance of hanging on to your wealth.

To end your working years with the kind of wealth that will give you a comfortable, confident retirement, you’ll need a strategy. You’ll need discipline. And you’ll need help.

A trusted financial professional can help keep you on track as you set your goals, build your fortune and then, at long last, enjoy it.

Can You Save Too Much in Your 401(k)?

Kim Franke-Folstad contributed to this article.

Investment advisory services offered through AE Wealth Management, LLC (AEWM). AEWM and Max Wealth & Insurance Solutions are not affiliated entities. Investing involves risk including the potential loss of principal.

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

TOPICS

Max Hechtman is an Investment Adviser Representative and insurance professional. He is partner and president of California-based Max Wealth & Insurance Solutions (CA License # 0H29034). His goal is to help his clients work toward a safe and conservative retirement using a variety financial vehicles. Hechtman has been advising clients for 14 years.