Retirement Investment Advice

Any retirement investment advice should consider the differing life circumstances that retirees find themselves in. Retirement is a time when people want to enjoy life. They will need income to cover all their expenses, which means making a proper assessment of their retirement costs.

Income

Your aggregated assets and other income streams provide you with your net income for your retirement years. These income streams include Social Security benefits, pensions, annuities as well as whole life insurance premiums. When deciding which investments to add to your retirement portfolio, your risk tolerance should be noted.

Expenses

Your investments will need to provide an income stream that covers your monthly retirement expenses. When making an expense projection, you should anticipate an expected time horizon for your retirement years. Expenses will need to factor in liabilities such as insurance, medical costs as well as the housing arrangement in your retirement years.

Beating Inflation

Every retiree worries about the value of saved assets declining over the years. The problem with inflation is that although it has been historically low in the United States, there is still no way to forecast what higher rates of inflation the future will bring. Assuming only 3 percent inflation, $1 million would only be worth roughly $400,000 in 30 years’ time. You can buy certain assets that are guaranteed to keep up with inflation called treasury inflation protected securities. They can be purchased directly from the federal government, or you can buy into a mutual fund that specializes in TIPS. These assets can hedge part of your retirement portfolio against inflation and can be part of your 401(k) plan.