Investing in retirement is much different than investing during your working career.
During your working career you can add money to your individual company 401(k) retirement plan account every year. Your company also matches your retirement plan contributions each year.
When you retire you have more money going out than you have coming in every year. You don’t have the ability to add significant amounts of money to your investment accounts.
Think of the difference between a working investor and a retired investor in terms of a football game. When you are working, you can afford to be on the investment offense. You can invest aggressively and take more stock market risk.
When you are retired, you have to move to the investment defense. Your retirement savings have to be protected from periodic stock market declines. You can’t afford to lose a large part of your retirement savings.
Most financial advisors rely solely on offensive investment strategies. Ideas on how to “beat the market” are all over the television, internet, and in your mailbox.
As you get closer to your estimated retirement date, think more about managing your stock market risk. Find an investment professional you can verbalize a stock market risk management game plan.
There are financial advisors who don’t sell financial products. Their entire compensations is based the preservation and growth of your company 401(k) retirement plan account value.
The secret to retirement investing is to keep what you have. The best investment management strategy to achieve that goal is to work with an experienced investment professional.
Ric Lager
Lager & Company, Inc.
