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
Be a smarter, better informed investor.
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.
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.
-
Tariffs, Inflation, Uncertainty, Oh My: How to Feel Less Stressed About Finances Now, ReallyTariffs, high prices and an uncertain economy getting you down? These steps can help.
-
IRS Updates Capital Gains Tax Thresholds for 2026: Here’s What’s NewCapital Gains The IRS has increased the capital gains tax income thresholds for 2026. You'll need this information to help minimize your tax burden.
-
Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning AttorneyCongratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: How to Navigate the Legal Boundaries of Tenant Rights During a Family CrisisThis family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
-
Eight Steps to Help Get You Through the Open Enrollment Jungle at WorkWondering how to survive open enrollment this year? Arm yourself with these tools to cut through the process and get the best workplace benefits for you.
-
Seven Moves for High-Net-Worth People to Make Before End of 2025, From a Financial PlannerIt's time to focus on how they can potentially reduce their taxes, align their finances with family goals and build their financial confidence for the new year.
-
I'm a Financial Planner: These Are the Seven Tiers of Retirement Well-BeingLet's apply Maslow's hierarchy of needs to financial planning to create a guide for ranking financial priorities.
-
Why More Americans Are Redefining Retirement, Just Like I DidRetirement readiness requires more than just money. You have a lot of decisions to make about what kind of life you want to live and how to make it happen.
-
A Compelling Case for Why Property Investing Reigns Supreme, From a Real Estate Investing ProInvestment data show real estate's superior risk-adjusted returns and unprecedented tax advantages through strategies like 1031 exchanges and opportunity zones.
-
Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way.
